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Article 8
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When any circumstance set forth in the subparagraphs below occurs after an issuer obtains qualification approval, its issuance of call (put) warrants shall be suspended, and resumed only after such circumstances are rectified. The issuance of any warrants already approved but not yet issued shall be suspended, and the suspension shall be reported to the competent authority; the validity of any call (put) warrants already issued shall not be affected:
- The issuer fails to conform to paragraph 1 or the latter part of paragraph 2, Article 3 of the Issuance Regulations;
- The issuer fails to conform to any of the financial conditions in Article 5, paragraph 2, subparagraphs 1 and 2, or paragraph 3, subparagraphs 1, 2 and 5, of the Issuance Regulations, or its latest financial report as having been reviewed by a CPA fails to conform to the above provisions;
- The operation of warrants business fails to conform to any of the circumstances in Article 5, paragraph 2, subparagraphs 4 to 7 of the Issuance Regulations, or a branch unit as mentioned in Article 5, paragraph 3, subparagraph 5 of the Issuance Regulations fails to conform to the aforementioned provisions.
- Any of the circumstances in Article 7, subparagraphs 3 to 10 of the Issuance Regulations applies to the issuer.
If any of the events listed in the subparagraphs below occurs after an issuer has obtained qualification approval, the issuer shall be restricted from applying for issuance of call (put) warrants for 1 year. The issuance of warrants already approved but not yet issued shall be suspended, and the suspension shall be reported to the competent authority for recordation. However, the validity of call (put) warrants already issued shall not be affected:
- The issuer is ranked in Level 5 for the most recent year, or in Level 4 for the most recent 2 years, in the assessment conducted pursuant to the Operational Guidelines for Assessment of Securities Firms Risk Management System.
- The issuer has violated Article 17, paragraph 1 herein or provisions of the TWSE Operation Directions Governing Liquidity Providers of Call (Put) Warrants, and it has been sanctioned within the most recent year by the TWSE and the Taipei Exchange ("TPEx") by imposition of penalties in a cumulative amount of NT$300,000 or more or by restriction of application for issuance of call (put) warrants two times.
- The issuer has been restricted by the TWSE from applying for issuance of call (put) warrants because of an irregularity in the quotation system of its call (put) warrant liquidity provider in the current year, and it still has failed to take corrective action.
Directions for handling irregularities in the quotation system of a call (put) warrant liquidity provider shall be separately prescribed by the TWSE.
The TWSE may report an issuer in writing to the competent authority for recordation if the issuer fails to issue any call (put) warrants for 1 year or more, or if the issuer has been under suspension from call (put) warrants issuance pursuant to paragraph 1 for 1 year or more and still fails to take corrective action.
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Article 9
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After the issuer receives approval as a qualified issuer of call (put) warrants and wishes to apply to the TWSE for listing of a planned call (put) warrants issue, the issuer shall apply to the TWSE with an Application for Listing of Call (Put) Warrants (Attachment) filled out in full and with the required documents attached. Following TWSE approval of the issuer's issuance plan, the TWSE will immediately issue a letter of approval, with a copy to the competent authority, provided that depending on the issuer's financial and business condition, the status of the underlying instrument, the number of call (put) warrants already listed on the market with identical or similar types of underlying instruments and their expiration dates and distributions, the TWSE may withhold approval, limit the number of warrants to be listed, or impose other conditions.
For listed warrants, in the event that the outstanding issuance units reach 80 percent or more of the actual total number of issuance units, the issuer may apply to the TWSE for a follow-on issue of call (put) warrants. The application shall be made within 2 business days from the next business day following the date of the event's occurrence but at least 10 business days before the last trading day for the warrants. The term "actual total number of issuance units," as used above, means the number arrived at by adding the total number of issuance units of the initial issue and the number of issuance units of each subsequent follow-on issue together and then deducting the accumulated number of issuance units cancelled and exercised.
After receiving a TWSE approval letter and submitting a copy to the competent authority, the issuer may entrust an underwriter with underwriting of the issue or it may sell the warrants itself, and shall provide a prospectus to the subscribers. But this provision shall not apply to a follow-on issuance of call (put) warrants.
The guidelines for information to be published in public offering prospectuses will be adopted by the TWSE in accordance with Article 13 of the Issuance Regulations and shall take force upon ratification by the competent authority.
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Article 10
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For applications for TWSE approval for listing of call (put) warrants, when the underlying securities are domestic stocks, they shall exclude stocks listed on the Taiwan Innovation Board and conform to each of the following conditions:
- Market value: NT$10 billion or more.
- The volume of shares traded during the most recent 3 calendar months shall account for 20 percent of the total of outstanding shares, or the average monthly volume of shares traded in the most recent 3 months shall reach 100 million shares or more.
- The financial report for the most recent period, attested or audited by a certified public accountant, shall show no losses, or shall show no accumulated deficit if losses exist.
When the underlying instrument in an application for TWSE approval for listing of call (put) warrants is a Taiwan depositary receipt, it shall meet each of the following requirements:
- Units listed: 100 million units or more.
- In the most recent 3 months the ratio of the number units traded to the number of units listed shall reach 20 percent or more.
Conformance of underlying instrument with the standards of the preceding two paragraphs shall be based on quarterly TWSE announcements, provided that if during the period for announcement the financial report required to be submitted by the issuer of the underlying security under Article 36 of the Securities and Exchange Act does not conform with subparagraph 3 of paragraph 1, the TWSE will announce cancellation of the given security's qualification as the underlying of a call (put) warrant.
In applications to the TWSE for approval for listing of call (put) warrants, when the underlying security of the warrants is a domestic stock and the financial statement of the issuer of such stock for the most recent period audited or attested by a certified public accountant shows losses, there shall also be a statement of the reason for issuing warrants based on the underlying security.
In applications to the TWSE for approval for listing of call (put) warrants, when the underlying of the warrants is a domestic beneficial certificate or a domestic index, such underlying shall be limited to ETFs, futures ETFs, offshore ETFs, or indexes as announced by the TWSE.
In applications to the TWSE for approval for listing of call (put) warrants, if the underlying of the warrants is a foreign security or a foreign index, the underlying shall comply with the requirements prescribed in Article 8, subparagraph 3 of the Issuance Regulations and may not include TAIEX and related financial instruments as created by domestic or foreign institutions, unless such index is one created by the TWSE or TPEx jointly with a foreign institution not with Taiwan stock as the major component. If the underlying is a foreign stock, the market capitalization of the issuing company of the underlying security may not be equal to or less than US$500 million, and the volume of shares traded during the most recent 3 calendar months shall reach 20 percent or more of the total issued shares, or the average monthly volume of shares traded in the most recent 3 months shall reach 100 million shares or more. If the underlying is a foreign depositary receipt, the volume of units traded during the most recent 3 calendar months shall reach 20 percent or more of the listed units.
In applications to the TWSE for approval for listing of call (put) warrants, if the underlying of the warrants is a future, it must be a non-stock future listed and traded on the Taiwan Futures Exchange.
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