• Font Size：
  • S
  • M
  • L

Relevant Laws

Title：Regulations Governing the Offering and Issuance of Securities by Foreign Issuers (2023.12.29)
Article 7     When a foreign issuer files for public offering and issuance of securities, the FSC may reject the filing case if any of the following circumstances exists:
  1. The particulars registered are in violation of acts and regulations, or there are any misrepresentations or false statements contained in the application;
  2. The attesting CPA issues an audit report containing a disclaimer of opinion or adverse opinion.
  3. The attesting CPA issues an audit report containing a qualified opinion that affects the fair presentation of the financial report.
  4. The case review forms prepared by the foreign issuer, reviewed by the attesting CPA, or issued by the lead securities underwriter indicate any violation of laws or regulations or the articles of incorporation and such violation will affect the offering and issuance of securities.
  5. A legal opinion issued by a lawyer indicates a violation of acts or regulations has occurred that affects the offering and issuance of the securities.
  6. The evaluation report issued by the securities underwriter fails to clearly indicate the feasibility, necessity, and reasonableness of the current plan to offer and issue securities.
  7. The foreign issuer files any case under paragraph 1 of the preceding article within 3 months after receiving notice from the FSC rejecting, voiding, or revoking a case filed by the foreign issuer under these Regulations or after the foreign issuer has withdrawn such a filing. This restriction does not apply, however, if the present case is for issuance of new shares or sponsored issuance of depositary receipts in connection with a merger, with acquiring shares of another company, or an acquisition or demerger.
  8. Breach or non-performance of a commitment made at the time of the application for listing or OTC trading of stock, where the circumstances are serious and remain uncorrected.
  9. The FSC discovers a violation of law or regulation, where the circumstances are serious, or the FSC deems it necessary to reject the case to protect the public interest.
    Article 4 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall apply mutatis mutandis to circumstances under which a foreign issuer may not offer and issue securities.
Article 8     When a primary exchange (or OTC) listed company conducts a case under Article 6, paragraph 1, subparagraphs 1 to 3, or an emerging stock company conducts a case under Article 6, paragraph 1, subparagraphs 3 or 6, the FSC may reject the filing if any of the following circumstances exist:
  1. The present plan for the offering and issuance of securities is unfeasible, unnecessary, or unreasonable.
  2. Any of the following circumstances has existed with respect to any previous plan for offering and issuance or private placement of securities, and the circumstance has not been corrected:
    1. Without just cause, the process of implementation has been seriously delayed, and the implementation has not yet been completed.
    2. Without just cause, the plan has undergone material change or failed to produce reasonable benefit. However, in the event more than 3 years have passed from the completion date of the plan until the filing date, such restriction does not apply.
    3. The securities offering and issuance plan has undergone material change, but the change has not yet been reported to a shareholders' meeting for approval.
    4. The company has failed in the most recent fiscal year to scrupulously observe the provisions of Article 10, paragraph 1, subparagraphs 2 to 6, and paragraph 3.
  3. Any previous private placement of securities did not conform to Articles 43-6 to 43-8 of the Act or the provisions of the Directions for Public Companies Conducting Private Placements of Securities, where the circumstances are serious.
  4. Any important content of the present plan for the offering and issuance of securities (such as issuance rules, source of funds, or particulars of the plan) has not been placed on the agenda of a board meeting or shareholders meeting and adopted by resolution at such a meeting.
  5. The company has lent a large amount of money to another party for purposes other than financing needs arising from a business transaction with another company or business firm, and has not yet rectified the situation.
  6. The company has entered into a non-arm's-length transaction of material significance, and has not yet rectified the situation.
  7. The company is filing for registration of a cash capital increase or issue of corporate bonds, but holds liquid financial asset investments, idle assets, or investment property, with no plan to actively dispose of or develop such holdings, and they amount to either: (1) 40 percent or more of the equity attributable to owners of the parent in the most recent financial reports audited and attested, or reviewed, by a CPA, or (2) 60 percent of the total amount of funds to be raised through the cash capital increase or corporate bond issuance. However, this provision does not apply if the funds to be raised will be used to purchase real estate, plants, or equipment or used for merger of a company that is not engaged primarily in the business of trading of securities, and furthermore there is a concrete fund raising plan evidencing the need to raise the funds.
  8. Proceeds from the cash capital increase or corporate bond issuance plan are to be used to invest in a company engaged primarily in the business of trading of securities, or to establish a securities firm or a securities service enterprise.
  9. The company has failed to prepare its financial statements in accordance with relevant acts or regulations and with applicable accounting principles, where the circumstances are of material significance.
  10. Any circumstance in violation of Article 4, paragraph 3.
  11. The internal control system is materially deficient in design or implementation.
  12. The company's share price fluctuated abnormally during the month prior to the date of filing.
  13. The foreign issuer or its current chairperson, general manager, or de facto responsible person has received a sentence of imprisonment for a fixed term or a more severe punishment from a court in the past 3 years due to violation of laws governing business and industry or due to a crime involving breach of faith such as corruption, malfeasance, fraud, breach of fiduciary duty, or embezzlement, or has an obligation for damages arising from a violation of securities laws or regulations and has failed to duly perform the obligation.
  14. Collateral has been provided for a loan of any third party in violation of Article 5 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, the circumstances are serious, and there has been no improvement.
  15. There is an issuance of new shares in connection with a merger, or an issuance of new shares in connection with receiving transfer of shares of another company, or an issuance of new shares in connection with an acquisition or demerger conducted in accordance with related laws, and any of the following circumstances exists:
    1. There has been a material violation of the provisions of Chapter 2, Section 5 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
    2. The received or acquired shares are not newly issued shares of the other company, non-current equity investment held by it, or previously issued shares held by the shareholders of the other company.
    3. The ownership rights over the received shares or the acquired business or assets are encumbered or limited in such a way that restrictions on the trading rights are imposed.
    4. An audit report with unqualified opinion was not issued by a CPA for the most recent annual financial report of a merged target company; provided, that this provision does not apply where an audit report with qualified opinion was issued together with an unqualified opinion on the balance sheet.
  16. An event set out in Article 5-1, paragraph 1, subparagraph 6 occurs, and any of the following circumstances exists:
    1. A filing for issuance of new shares for cash, and any director or supervisor, or shareholder who holds shares over 10 percent of the total issued shares of the issuer, fails to undertake to place a certain percentage of their shares under the custody of a centralized securities depository enterprise.
    2. A filing for issuance of corporate bonds with equity characteristics, for which the issuance rules do not specify that the offerees are required, from the issuance date of the corporate bonds, to place the corporate bonds and any subsequently converted or subscribed shares under the custody of the centralized securities depository enterprise for 1 year.
  17. A subscriber, or an ultimate source of subscription, of the present offering and issuance of overseas securities is a related party of the foreign issuer. The term "related party" is as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
  18. The securities underwriter, at the time the foreign issuer files for registration, has received cumulatively 10 demerit points in the most recent year from the FSC, TWSE, TPEx, and Taiwan Securities Association, and three months have not elapsed since the date when the demerit points cumulatively reached 10 points. However, this restriction does not apply to an issue of new shares for cash capital increase that are to be sold in the public sale prior to an initial exchange or OTC listing.
  19. As the FSC otherwise deems necessary to protect the public interest.
    The term "engaged primarily in the business of trading of securities" as referred to in subparagraphs 7 and 8 of the preceding paragraph shall mean—with respect to a company merged by the issuer, or a company in which the issuer has directly invested, or in which a subsidiary of the issuer has invested under the equity method—that the merged or invested company's cash, together with cash equivalents, financial assets listed under current assets, and holdings of securities issued by the issuer account for 50 percent or more of the total assets value of such company, and the revenue or profit/loss respectively from trading or holding of the aforesaid assets account for 50 percent or more of the revenue or profit/loss of such company.
    When a foreign issuer conducts a case under Article 5, paragraph 1, subparagraph 2 or 3, the provisions of subparagraph 7 of paragraph 1 need not apply; if the underwriter evaluation report clearly states the feasibility of the capital allocations and the reasonableness of the expected benefits of the present plan for offering and issuance of securities, then the provisions regarding the necessity of the plan, as set out in subparagraph 6 of paragraph 1 of the preceding article and in subparagraph 1 of paragraph 1 of this article, need not apply.
    When a primary exchange (or OTC) listed company issues new shares in connection with a merger, acquisition of shares of another company, or acquisition or demerger, the provisions of subparagraphs 2, 5, 12, and 13 of paragraph 1 need not apply.
    When a primary exchange (or OTC) listed company issuing overseas straight corporate bonds has engaged a securities underwriter to publicly underwrite the bonds, the provisions of paragraph 1, subparagraph 12 need not apply.
    When a secondary exchange (or OTC) listed company conducts a case under Article 6, paragraph 1, subparagraphs 1, 4, or 5, the subparagraphs of paragraph 1 hereof shall apply mutatis mutandis. However, if it is issuing new shares or sponsoring issuance of TDRs in connection with a merger, acquisition of shares of another company, or acquisition or demerger, it may be exempted from the mutatis mutandis application of subparagraphs 2, 5, 12, and 13 of paragraph 1.
Article 34     A secondary exchange (or OTC) listed company that sponsors issuance of TDRs shall prepare a prospectus. In addition to the particulars required in accordance with the laws and regulations of the secondary exchange (or OTC) listed company's country of registration and the country where its shares are listed, the following items shall be specified in the content of the prospectus:
  1. On the front cover of the prospectus, the TDR code shall be printed in the upper right hand corner, and the following items shall be printed in sequential order:
    1. Name of the company.
    2. The prospectus is prepared for purposes of an issue of TDRs: the source of the securities represented by the TDRs; the quantity of the securities represented; the total number of units issued; the price-setting method for the current issue; the premium/discount percentage of the issue price to the underlying stock price; the total monetary amount of the issue; the public underwriting percentage; the underwriting and allotment method. For the issuance plan, the internal page numbers to consult for the related content may be noted.
    3. Outline of the purpose of the fund utilization plan and anticipated benefits and notes referencing the internal page numbers for the related content.
    4. The following content shall be printed prominently:
      1. Country of registration of the issuer.
      2. The issuer is a company that is a foreign enterprise listed in Taiwan using New Taiwan Dollars.
      3. An investor shall carefully read the contents of this prospectus, and shall note the risks associated with this company. In addition, the internal page numbers to consult for the related content shall be noted.
      4. The effective registration of the securities may not be used in any advertisement as proof of the veracity of registration particulars or as a guarantee the value of the securities.
      5. If there is any misrepresentation or nondisclosure in the content of the prospectus, the foreign issuer and its responsible person and any other persons who have signed or sealed the prospectus shall be held liable in accordance with law.
      6. Web addresses for querying prospectus information, including the information disclosure website specified by the FSC and the website on which the company discloses information related to the prospectus.
    5. Date of printing.
    6. Related underwriting fees.
    7. In the event of any of the following circumstances, the company shall note the circumstance on the cover in a prominent font:
      1. Where there has been a change in the code of the TDRs, the original stock code shall be printed along with the new stock code in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
      2. Where there has been a change in the company name, the change shall be disclosed by printing the new and old names adjacently in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
      3. Where TDRs are issued in connection with a merger or acquisition (including merger or consolidation, acquisition, or demerger) or acquisition of another company's shares, if there are any restrictions on transfer or pledge of the issued TDRs, such restrictions shall be noted.
    8. A prospectus prepared in order to register for public offering and issuance of securities shall note on its front cover that it is a draft version for the purpose of such registration.
  2. The inside front cover of the prospectus shall have the following items relevant to the current issue printed in sequential order:
    1. Sources of the paid-in capital before the current issue, including the respective amounts from cash capital increase, capital increase through capitalization of retained earnings, capital increase through capitalization of capital reserve, capital increase in connection with a merger, or other sources of funds, and the respective ratios thereof to the paid-in capital amount.
    2. The prospectus distribution plan: specify the places where the prospectus will be displayed, the distribution methods, and the methods for requesting and obtaining the prospectus.
    3. Name, address, web address, and telephone number of the shareholder services agent.
    4. Name, address, web address, and telephone number of the depositary institution.
    5. Name, address, web address, and telephone number of the custodian institution.
    6. Name, address, web address, and telephone number of the credit rating institution.
    7. Names of the CPAs who attested the financial report for the most recent year and the domestic CPAs who reviewed it, and the CPA firm names, addresses, web addresses, and telephone numbers.
    8. Name of the domestic lawyers who prepared the legal opinion, and the name, address, web address, and telephone number of the law firm. If opinions of any other lawyers are used (e.g. lawyers of the country of registration and the country of the principal place of business), the above information for those lawyers shall also be disclosed together.
    9. Names, job titles, contact telephone numbers, and e-mail addresses of the spokesperson and deputy spokesperson.
    10. Company information (including addresses, web addresses, and phone numbers of the head office and any branches, and the name, job title, contact telephone number, and e-mail address of the litigious and non-litigious agent within the ROC).
    11. Address of website on which can be queried trading information of the country where the securities represented by the TDRs are listed and information on the finances and business of the company.
  3. The content of the prospectus shall specify the following items:
    1. Company overview (including a company and group introduction, group structure, risk matters, capital stock, directors, supervisors, managerial officers, and major shareholder information).
    2. Operations overview (including business scope, competitive strategy, business objectives, strategy, and plan; market, production, and sales overview; major contracts, and any other matters requiring supplementary explanation).
    3. Issue plan and fund utilization plan (including the price-setting method for the current issue and an analysis of the fund utilization plan) and matters stipulated therein.
    4. Financial overview (including summary financial data, financial statements, and a review and analysis of the financial condition and operating results, for the most recent 5 fiscal years, and other important matters).
    5. Status of corporate governance operations and other matters requiring supplementary explanation.
    6. Dividend policy and its implementation status.
    7. The concluding opinion of the securities underwriter's evaluation.
    8. Legal opinion issued by a lawyer.
    9. The principal content of the custody agreement (or other custody documents) and the depositary agreement.
    10. Any matters requiring attention in connection with restrictions on securities transactions by foreigner nationals, tax burdens, and tax payment procedures, of the secondary exchange (or OTC) listed company's country of registration and country in which its shares are listed.
    11. The highest, lowest, and average market prices of the stock represented by the TDRs for the most recent 6 months on any securities trading markets on which it is listed and the closing price on the business day preceding the filing date. Except in cases of public sale of TDRs prior to initial exchange listing (or OTC listing), a note shall also be made stating the differences in each of the aforesaid market prices between the markets on which the security is listed. If the period of listing has been less than 6 months, the stated period may be the actual period of listing.
    12. Rights exercisable by, or restrictions placed on, holders of the securities represented by the TDRs.
    13. For sponsored issuance of TDRs for purposes of conversion or performance of obligations in connection with exercise of foreign convertible bonds or corporate bonds with warrants listed for trading on an overseas securities market, the issuance rules for the convertible bonds or corporate bonds with warrants.
    14. Those who have retained an FSC-approved or -recognized credit rating institution to conduct a credit rating shall disclose the credit rating report issued by the credit rating institution.
    15. Any other important stipulations or other matters that the FSC requires to be specified.
  4. The back cover of the prospectus shall be signed or sealed by more than half of the company's directors and by its general manager.
  5. The securities underwriter and its responsible person, CPAs, lawyers, and other experts shall sign or seal the prospectus indicating their endorsement of the part for which they are responsible.
    The draft prospectus shall be transmitted, as an electronic file in the format prescribed by the FSC, to the information disclosure website specified by the FSC and, within 30 days from the date of receipt of the notice of effective registration, the final amended prospectus shall be transmitted as an electronic file to the information disclosure website specified by the FSC.
    A secondary exchange (or OTC) listed company sponsoring issuance of TDRs by a depositary institution shall deliver the prospectus to offerees in advance.
Article 39     A secondary exchange (or OTC) listed company that simultaneously meets all of the conditions listed in the subparagraphs below may submit the Shelf Registration Statement for a Foreign Issuer Sponsoring Issuance of Taiwan Depositary Receipts (Attachment 15), provide all information required therein, along with all required documents to the FSC for effective registration. In addition, it shall complete the issuance within the scheduled issuance period.
  1. Its TDRs have been listed on the domestic stock exchange market or traded on the OTC stock market for a combined period of 1 year or more.
  2. It has periodically or non-periodically publicly disclosed its financial and business information to the public in accordance with laws and regulations in each of the past 3 years.
  3. Has not within the past 3 years made any serious violation of rules of the TWSE or TPEx regarding information disclosure.
  4. Has not within the past 3 years had any offering and issuance of securities rejected, voided, or revoked by the FSC or the competent authority of the country of listing. However, this restriction need not apply in cases where, since the date of delivery of the notice of effective registration, the issue has not been fully subscribed and payment therefore has not been fully collected in cash and the case has been voided or revoked by the FSC or the competent authority of the country of overseas listing.
  5. Any cash capital increase or corporate bond issuance plans effectively registered with FSC or the competent authority of the country of listing in the past 3 years have all been implemented as planned and on schedule, and no material changes have occurred.
  6. The domestic and overseas CPAs engaged by the issuer have not within the past 3 years received a warning or more severe sanction under the law for their handling of securities offering and issuance.
  7. The lead underwriter engaged by the issuer has not within the past 3 years been subject to any order under law or regulation to a sanction to dismiss any of its directors, supervisors, or managerial officers or a more severe sanction in connection with handling of securities offering and issuance.
    The scheduled issuance period referred to in the preceding paragraph may not exceed 1 year counting from the date of effective registration. The secondary exchange (or OTC) listed company shall set the period at the time of filing with the FSC.
    When a secondary exchange (or OTC) listed company issues TDRs during the scheduled issuance period, it shall engage an underwriter to underwrite the issuance in full on a firm commitment basis.