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Article 3
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The term "issuer" as used in these Regulations means a third party, other than the issuing company of the underlying security, that is concurrently engaged in the following three businesses: securities underwriting, proprietary dealing, and brokerage or intermediary services.
An issuer that is a foreign institution shall submit an approval letter or a performance undertaking from its board of directors, after which a branch unit within the territory of the Republic of China (ROC) or a branch unit established in ROC territory by a directly or indirectly wholly-owned subsidiary shall submit an application in the name of the foreign entity. The business operated by the aforementioned subsidiary or ROC-based branch unit shall comply with the provisions of the preceding paragraph.
If a foreign institution as referred to in the preceding paragraph has established a branch office within ROC territory through its directly or indirectly wholly owned subsidiary, the branch office shall be designated to be responsible for carrying out matters related to the issuance and exercise of the warrants and disclosure of relevant information.
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Article 5
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To issue call (put) warrants, an issuer shall first apply to the Financial Supervisory Commission (FSC) for accreditation as a qualified issuer of call (put) warrants.
When a domestic issuer applies to the FSC for accreditation as a qualified issuer of call (put) warrants, it shall meet the following qualifications. This provision shall not apply, however, in the case of failure to meet requirements of subparagraphs 3 to 7 if there has been concrete improvement of the circumstances and it has been accredited by the competent authority.
- The CPA-audited and attested financial report for the most recent period states net worth of not less than NT$3 billion and not lower than the paid-in capital. Its financial condition meets the requirements of the Regulations Governing Securities Firms.
- Regulatory capital adequacy ratio during the half-year period preceding the date of application was not less than 200 percent.
- It has not been issued a warning by the FSC under Article 66, subparagraph 1 of the Act within the last 3 months.
- It has not been subject to any sanction imposed by the FSC ordering dismissal of a director, supervisor, or managerial officer of the issuer, or any disposition to dismiss and replace its responsible person or other relevant personnel in the most recent half year.
- It has not been subject to any sanction imposed by the FSC during the most recent year involving suspension of business activities.
- It has not been subject to any sanction imposed by the FSC during the most recent 2 years involving voidance or revocation of any part of its permission for business.
- It has not been subject to any sanction imposed by the Taiwan Stock Exchange Corporation("TWSE"), Taipei Exchange ("TPEx"), or the Taiwan Futures Exchange Corporation ("TAIFEX " ) pursuant to the bylaws of those exchanges suspending or restricting its trading in the past year.
When a foreign issuer applies to the FSC for accreditation as a qualified issuer of call (put) warrants, it shall meet the following qualifications.
- The CPA-audited and attested financial report for the most recent period states net worth of not less than NT$3 billion and not lower than the paid-in capital.
- It has a credit rating of a specific level or higher issued by a credit rating agency recognized by the FSC.
- It has experience in operating international call (put) warrant businesses.
- It has not been sanctioned by the competent authority in its home country in the preceding 2 years.
- The net value of its branch unit in the territory of the ROC, or branch unit established in the territory of the ROC by its directly or indirectly wholly-owned subsidiary shall reach NT$150 million, and shall meet the provisions in subparagraphs 2 to 7 of the preceding paragraph.
If an issuer engages a foreign institution to act as a risk management institution or as a foreign issuer, it shall first obtain a consent letter from the competent authority in charge of foreign exchange.
In order to apply to the FSC for accreditation as a qualified issuer of call (put) warrants, an issuer shall submit an Application for Accreditation as a Qualified Call (Put) Warrants Issuer furnishing all required particulars, together with duplicate copies of all other required documents, to the TWSE or TPEx. After the TWSE or TPEx examines and approves the application, the applicant shall file the examination opinion with the FSC for final review and approval.
In carrying out final review and approval of an application for accreditation of qualifications to issue call (put) warrants as referred to in the first paragraph of this article, the FSC shall act on the basis of a financial report duly audited and attested by a certified public accountant (CPA), a licensed attorney's opinion regarding legal and regulatory compliance, credit rating information, related documents, and an examination opinion issued by the TWSE or the TPEx.
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Article 7
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When any one of the following circumstances applies to an issuer that has applied for accreditation as a qualified issuer of call (put) warrants, the FSC may deny accreditation; for an issuer that has obtained accreditation, the FSC may void or revoke the accreditation:
- It has made incomplete submission of required application documents, and has failed to supplement those documents by the deadline prescribed by the FSC.
- Particulars of the application do not conform to laws and regulations, or the application contains misrepresentations or nondisclosures.
- There is a major loss of creditworthiness which has yet to be settled, or four years have not elapsed since settlement.
- There is a lack of appropriate risk management measures.
- The issuer has been incapable of meeting obligations in connection with a previous issue of call (put) warrants.
- In the most recent year the issuer has failed to comply with TWSE or TPEx regulations applicable to call (put) warrants, and improvement within a specified time period was not possible.
- The issuer fails to prepare financial reports in accordance with generally accepted accounting principles, or effective enforcement of its internal control system is not possible.
- The issuer violates the preceding Article, or an assessment shows that its filed particulars might have material impact on its financial status.
- There is a major dispute with respect to rights and interests that could influence the issuer's finances or business, and there is no resolution or improvement.
- There is factual evidence of material irregularities with the issuer's finances or business.
- The issuer does not comply with the conditions Article 5, paragraph 2 or 3.
- The FSC otherwise considers it necessary to deny accreditation in order to protect the public interest.
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