Article 49
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If any of the following circumstances applies to a listed company, the TWSE may place its listed securities under an altered trading method:
- The latest individual financial report, as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, shows that its net worth is less than one-half of its share capital stated on the financial report.
- A shareholders meeting has not been held within 6 months after the end of the fiscal year.
- The attesting CPA for the most recent financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act issues an audit report or review report indicating substantial uncertainty about the ability to continue as a going concern, or the attesting CPA issues a qualified audit report or a review report with a qualified conclusion. However, this shall not apply if it is otherwise permitted by the laws and regulations of the competent authority, or in the case of an interim financial report if the reason is that the calculation of investment in a non-major subsidiary, or investment accounted for using the equity method, and the amount of profit or loss thereupon, is based on a financial report that has not been audited or reviewed by a CPA, and the attesting CPA has fully disclosed in the audit or review report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present. However, if an above-mentioned non-major subsidiary is a subsidiary of a financial holding company, its interim financial report shall also be audited or reviewed by a CPA in accordance with applicable laws and regulations.
- Violation of relevant bylaws or rules concerning the material information of a listed company, and failure to rectify the situation within the specified time after having been notified to proceed with disclosure process, and such violation was serious.
- Two-thirds or more of the directors or supervisors have been provisionally ordered to be suspended of the performance of their authorities and duties.
- A petition for re-organization has been filed to the court in accordance with Article 282 of the Company Act.
- Half or more of the directors have changed, such that any of the following circumstances exists, and it fails to make improvement within a specified time period ordered by the TWSE:
- The shareholding is too concentrated to meet the then-current shareholding dispersion criteria for listing.
- The newly appointed directors, supervisors, or president meet any of the conditions under Article 9, paragraph 1, subparagraph 8 of the TWSE Rules Governing Review of Securities Listings.
- The company is unable to punctually pay for the common corporate bonds or convertible corporate bonds which have matured or which the creditors requested it to redeem.
- Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit, where the TWSE is aware of such dishonor.
- After a demerger, the paid-in capital of an ordinary company or a technology company fails to comply with Article 4, paragraph 1, subparagraph 2 or Article 5, subparagraph 1, respectively, of the Rules Governing Review of Securities Listings.
- The number of companies held by an investment holding company falls below two companies; provided, for investment holding companies created as a result of share conversion, sale and assignment, transfer of business, demerger, or change of company name, this shall not apply within 1 year from the date of listing for trading.
- Failure to abide by an undertaking to purchase the shares held by other shareholders of a TWSE listed (or Taipei Exchange listed) subsidiary in which it has shareholding of more than 70 percent.
- Any of the following circumstances occurs in the handling of stock affairs:
- The company has not engaged an agent of stock affairs, and has not obtained the Taiwan Depository and Clearing Corporation's review and agreement to handle stock affairs.
- The Taiwan Depository and Clearing Corporation has audited and discovered a material irregularity in stock affairs, and the company has failed to correct the irregularity within the deadline set by the TWSE for corrections.
- Where explanations given in a press conference concerning material information fail to clarify points in question, and the TWSE deems it necessary to protect the rights and interests of investors.
- The number of TWSE listed common shares does not reach 25 percent of the total number of the company's issued common shares, and any of the circumstances in the following items exists:
- The share capital of TWSE listed common shares does not reach NT$600 million.
- The number of TWSE listed common shares does not reach 30 million shares.
- The requirements of Article 50, paragraph 2, subparagraph 13 cannot be met within 6 months after trading is suspended pursuant to Article 50, paragraph 1, subparagraph 14.
- A venture capital company fails to rectify within the prescribed time limit when its current financial reports show any of the following:
- The number of shares it invests and holds in any public company exceeds 30 percent of the total issued voting shares of said company.
- The total investment it holds in any invested company exceeds 20 percent of the total assets shown in the venture capital company's most updated financial reports.
- Its total investment fails to reach 60 percent of its total assets.
- It engages in any business other than those stipulated in the Rules Governing Guidance to Venture Capital Enterprises.
- The board of directors resolves to refer a dissolution proposal to a shareholders meeting for resolution.
- Upon other necessary reasons as determined by the TWSE.
If securities of a listed company have been placed under an altered trading method because of a circumstance in a subparagraph of the preceding paragraph, upon satisfaction of the below conditions, and freedom of any other of the above circumstances, the TWSE may resume trading of the company's securities by the normal trading method:
- Where the change of trading method was imposed pursuant to subparagraph 1 of the preceding paragraph, the financial reports for the most recent two periods registered and publicly announced pursuant to Article 36 of the Securities and Exchange Act each shows net worth exceeding NT$300 million and reaching one-half or more of the share capital stated on the financial report; in the event of a capital reduction, the operations for exchange of securities upon capital reduction are additionally completed.
- Where the change of trading method was imposed pursuant to subparagraph 2 of the preceding paragraph, and the shareholders meeting has been held.
- Where the change of trading method was imposed pursuant to subparagraph 3 of the preceding paragraph, and due to supplementation or correction, the circumstances specified in that subparagraph no longer exist.
- Where the change of trading method was imposed pursuant to subparagraph 4 of the preceding paragraph, and disclosure proceeding is commenced in compliance with the notice.
- After the trading method was changed pursuant to subparagraph 5 of the preceding paragraph, the preliminary injunction order was canceled by the court and one-third or more of the directors or supervisors are able to perform their authorities and duties.
- After the trading method was changed pursuant to subparagraph 6 of the preceding paragraph, the petition for re-organization was withdrawn or was conclusively dismissed by court pursuant to Article 283-1, subparagraph 1 or Article 285-1, paragraph 3, subparagraph 1; provided that the execution period of the altered trading method shall not be less than 3 months where the petition for re-organization was withdrawn.
- After the trading method was changed pursuant to subparagraph 7 of the preceding paragraph, supplementation or correction was made.
- After the trading method was changed pursuant to subparagraph 8 of the preceding paragraph, the company has repaid the debt or reached a settlement agreement with the creditors.
- Within 3 months of the trading day next following the date the trading method was changed pursuant to subparagraph 9 of the preceding paragraph, the listed company has completed any of the remedial procedures enumerated herein below, and the listed company has produced a direct or indirect note in evidence thereof from the clearing house, and no further instance of dishonor of negotiable instruments has occurred prior to resumption of normal settlement. However, if the listed company adopts the remedial procedure of "extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument," it shall additionally submit a rechecking form prescribed by the TWSE. The form shall be signed and certified by a CPA and a lawyer and submitted to the TWSE along with the other relevant documents and materials for approval and recordation:
- Extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument.
- Deposit the amount of the instrument into the financial enterprise that dishonored the instrument with a request that it be listed as provision for payment under "other payables."
- Pay the amount of the instrument out of the checking account or other payables account upon re-presentment of the instrument subsequent to its dishonoring.
- Where correction or improvement has been made by the listed company within 3 months of the trading day next following the date the trading method of the securities was changed pursuant to subparagraph 10 of the preceding paragraph.
- Where correction or improvement has been made within 3 months after the change of trading method of the securities pursuant to subparagraph 11 or subparagraph 12 of the preceding paragraph.
- Where supplementation or correction has been made after the trading method was changed pursuant to subparagraph 13 of the preceding paragraph.
- Where the points in question have been clarified after the trading method was changed pursuant to subparagraph 14 of the preceding paragraph, provided that if the TWSE determines there is any material deficiency in the design and execution of the company's internal control system, in addition to clarifying the points in question, the company shall revise its internal control system and shall have implemented the revisions for at least 3 months and obtained a CPA-issued audit opinion letter regarding the effectiveness of the aforementioned internal control system's design and execution.
- Where supplementation or correction has been made after the trading method was changed pursuant to subparagraph 15 of the preceding paragraph, and the single-quarter net profit before tax attributable to owners of the parent for each of the most recent consecutive two quarters is positive.
- Within two years after the securities have been placed under the altered trading method due to the circumstances in subparagraph 16 of the preceding paragraph, the sum of the net profit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches 3 percent or more of the share capital stated in the financial reports for the most recent period, and the requirements of Article 50, paragraph 2, subparagraph 13, items B to F are met.
- After the trading method was changed pursuant to subparagraph 17 of the preceding paragraph, correction or improvement is made.
- After the trading method was changed pursuant to subparagraph 18 of the preceding paragraph, the dissolution proposal is revoked by the board of directors, or the shareholders meeting fails to pass a resolution for the proposal.
- After the trading method was changed pursuant to subparagraph 19 of the preceding paragraph, correction or improvement is made upon the request of the TWSE.
Where the TWSE changes the trading method of listed securities pursuant to subparagraph 1 of the preceding paragraph, or where the TWSE restores the trading method to normal settlement pursuant to subparagraph 2 of the preceding paragraph, within 1 month of such action, the TWSE shall report such action to the Competent Authority for recordation.
The net worth referred to in Chapter IV and IV-1 means the equity attributable to owners of the parent as stated in the balance sheet prepared in accordance with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry.
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Article 50-1
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If any of the following circumstances applies to any TWSE listed company, the TWSE shall, in accordance with Article 144 of the Securities and Exchange Act, delist its securities, and report to the Competent Authority for Recordation:
- Any of the circumstances in Article 315, paragraph 1, subparagraphs 1 to 4 of the Company Act occurs, and registration of dissolution is completed; or any of the conditions specified in Article 9, Article 10, Article 11, Article 17, paragraph 2, Article 315, paragraph 1, subparagraph 8, or Article 397 of the Company Act, or Article 21 or Article 54 of the Financial Holding Company Act, occurs, and a relevant competent authority has revoked or voided its company registration, ordered its dissolution, or voided its approval, or the court has ruled on dissolution.
- Any conditions specified in Article 251 or Article 271 of the Company Act or the relevant authority has revoked its approval for other reasons.
- Confirmation of bankruptcy by any court.
- Confirmation of reorganization by any court, or denial of reorganization motion issued in accordance with Article 285-1, paragraph 3, subparagraph 2 of the Company Act.
- (deleted)
- The total amount of its listed preferred shares is less than NT$200 million, or the number of shares issued is less than 20 million.
- Where any of the following circumstances applies to the company's securities:
- Trading of the securities has been suspended pursuant to the provisions of the preceding article, and after 6 consecutive months trading of its securities is not resumed, provided that this rule does not apply to trading suspended pursuant to paragraph 1, subparagraph 14 of the preceding article.
- Trading of the securities is resumed after having been suspended pursuant to subparagraph 2 of paragraph 1 of the preceding article for less than 6 months, and, within 6 months from the resumption of trading, trading is again suspended pursuant to subparagraph 2 of paragraph 1 of the preceding article, and the aggregate period of suspension of trading exceeds 6 months.
- Record of refusal of financial institutions to transact with the company or of the circumstances referred to in paragraph 1, subparagraph 9 of the preceding Article where the company has failed to carry out remedial procedures as set forth in Article 49, paragraph 2, subparagraph 9 and submit relevant documentary proof within 6 months of the trading day next following the date of suspension of trading. However, if the negotiable instrument is retrieved by means of a settlement within 3 months of the trading day next following the date of suspension of trading, an application may be filed with the TWSE for re-calculation of the duration of the period of suspension of trading as from a date approved by the TWSE. Such application shall be accompanied by the settlement document, a photocopy of the negotiable instrument, and other relevant materials. Only one such extension may be granted.
- Where the most recent financial report as publicly announced and registered in accordance with Article 36 of the Securities and Exchange Act shows a negative net worth. Likewise, where a subsequently publicly announced and registered financial report of a non-holding company or consolidated financial report of a holding company shows a negative net worth.
- The business of the company has completely stopped for 6 months and cannot commence quickly, or the publicly announced business revenue has been zero or negative for 6 consecutive months; provided such provisions shall not be applicable to a company, listed in accordance with Article 6-1 of Rules Governing Review of Securities Listings, which has no business income during the period of construction under the concession contract.
- Any conditions specified in Article 156 of the Securities and Exchange Act exists and the Competent Authority has ordered the suspension of trading of all of its securities for at least 3 months.
- A demerger from, or a general assignment to, or a merger with another company, where the resulting entity does not satisfy, respectively, the requirements for continued listing under Article 53-19, Article 53-10, or Article 53-2; or the company has changed its name to investment holding company but does not meet the requirements of Article 20, paragraph 1, subparagraphs 1, 2, 4, 5, 7, 8, or 9 of the TWSE Rules Governing Review of Securities Listings.
- Material breach of the Agreement for Listing.
- Final confirmation by a judicial authority that any of the following circumstances applies to the listed company:
- The financial reports, accounting books, etc. provided by the company during the application for listing contain false and concealed items, and upon discounting for such false and concealed items, its profitability does not conform to the listing requirements; provided, the above shall not be applicable if 5 years have passed between the listing date and the date of confirmation by a judicial authority.
- Satisfies the proviso of the preceding sub-item, and the false and concealed accounting items still exists at the time of the final confirmation of judgment, and upon discounting for such false and concealed items, its current revenue generating ability does not conform to the listing requirements.
- Over 70 percent of its total issued shares or paid-in capital is held by another TWSE listed (or Taipei Exchange listed) company. However, if the other TWSE listed (or Taipei Exchange listed) company has acquired the shares of the TWSE listed company and conducted a merger or share conversion, the provisions of Chapter IV-1 regarding delisting procedures shall apply.
- Circumstances set forth in paragraph 1, subparagraph 12 of the preceding article and inability to achieve compliance with paragraph 2, subparagraph 12 of the same article within 6 months from the trading day next following the suspension of trading.
- The competent authority for the target industry duly appoints a receiver to take receivership of the financial institution.
- Other events requiring delisting.
If a listed company's securities have been suspended from trading by the TWSE because of a circumstance in paragraph 1, subparagraph 1 or 5, of the preceding Article for a full 6 months without correction, or if the circumstance in subparagraph 8 of the preceding paragraph existed, and the TWSE has announced but not yet implemented the delisting of its securities, if the listed company satisfies the requirements of the respective subparagraphs below, is free from any other circumstance in the subparagraphs of the preceding paragraph, and submits an application to the TWSE together with relevant materials and evidence at least 8 business days prior to the delisting implementation date, the TWSE may publicly announce an exemption from implementation of the delisting, and report to the Competent Authority for recordation:
- Where a listed company's securities have been suspended from trading by the TWSE because of a circumstance in paragraph 1, subparagraph 1 or 5, of the preceding Article for a full 6 months without correction, and it meets the supplementation requirements of paragraph 2, subparagraph 1 or 5 of the preceding Article.
- Where, after public announcement of delisting for reasons in subparagraph 8 above, the record of refusal of transaction by a financial institution or the dishonor of a negotiable instrument because of insufficient funds on deposit has been resolved by carrying out remedial procedures as set forth in Article 49, paragraph 2, subparagraph 9 and submitting relevant documentary proof.
A listed company that makes full supplementations or corrections before the implementation date after its listed securities have been publicly announced for delisting shall be eligible for an exemption from implementation of delisting only if such listed company has never previously been granted an exemption from delisting based on the same reasons.
Where delisting is occasioned by the circumstances set out in paragraph 1, subparagraph 17 after receiving the notice of receivership from the Competent Authority, the TWSE shall immediately announce that beginning from the next day the trading of the company's listed securities shall be suspended for a period of 10 days, and before the expiration of the period of suspended trading shall announce that beginning from the next day following expiration of the suspension, the securities shall be traded for 20 days under the altered trading method in periodic call auction trading, after which the listed securities shall be delisted.
Except in the case of a merger conducted under Chapter IV-1, a listed company applying for delisting of its securities in accordance with Article 145 of the Securities and Exchange Act shall process the application in accordance with "Procedures for Handling Applications for Delisting by Listed Companies."
Where a listed company delists in accordance with paragraph 1, subparagraph 15 herein, the listed parent company shall undertake to unconditionally purchase the remaining outstanding shares of the company.
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