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Article 29
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A domestic issuer that applies for the listing of stocks at the TIB must comply with the government’s industrial development strategies, have key core technologies and the ability to innovate or have an innovative operational model, and should meet the following qualifications:
- Years of establishment: Has been around for at least two years since its incorporation under the Company Act at the time of application for listing.
- Has issued 10 million or more shares at the time of application for listing.
- Market value and financial standards: Must meet one the following standards at the time of application for listing:
- Market value is NT$1 billion or more, total operating revenue as stated in the financial reports for the most recent four quarters is not less than NT$100 million and the applicant must prove it has the working capital sufficient for 12 months after listing in the market.
- For an applicant doing business in the biotechnology and pharmaceutical industry, its market value is NT$2 billion or more, and it must prove it has not less than 125 percent of the working capital required for 12 months after listing in the market. If an applicant is developing new medicine, its core products must have passed stage 1 of a clinical trial.
- Market value is NT$4 billion or more, and the applicant must prove it has not less than 125 percent of the working capital required for 12 months after listing in the market.
- Dispersion of share ownership: The number of registered shareholders is 50 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, registered shareholders hold 5 percent or more of the total issued shares, or at least 5 million shares.
- An applicant listed in the food industry or with income from dining and beverage services exceeding 50 percent of its total operating revenues in the most recent fiscal year must meet the requirements in the following items:
- Establish a laboratory to engage in self-inspection.
- Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
- Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection etc.
- Recommended by 2 or more securities underwriters.
A foreign issuer that applies for the listing of stocks at the TIB must meet, in addition to the requirements in the subparagraphs 2 to 6 of the preceding paragraph, the following qualifications:
- Meet the application regulations under the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, provided that if the people, juristic persons, group or other institutions directly or indirectly own shares or invest in the issuer for more than 30 percent of its value, or have control over the issuer, it must obtain an approval from the competent authority on a case-by-case basis.
- Years of establishment: The applicant or any of its subordinate companies must have 2 or more years of business records.
- The inspection institution under item B of subparagraph 5 of the preceding paragraph may be replaced by a laboratory or inspection institution certified by the local competent authority, international certification institution or an institution appointed by its competent authority.
The TWSE will agree to list its stock of a domestic issuer or a foreign issuer applying for the listing of its stock at the TIB in the preceding two paragraphs only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application.
A recommending securities underwriter should issue an evaluation opinion on the requirements on application for listing, i.e. compliance with the government’s industrial development strategies, key core technologies and the ability to innovate or an innovative operational model, in the first paragraph.
The core products in item B of subparagraph 3 of paragraph 1 means the biotechnological and pharmaceutical products that are the focus of a domestic issuer or foreign issuer in its engagement in development, application and commercialization of new drugs at the time of application for listing.
Article 28-2, paragraph 1 applies mutatis mutandis to the definition of securities underwriter in subparagraph 6 of paragraph 1.
Financial reports as referred to in this chapter shall be governed mutatis mutandis by Article 7, paragraphs 1 and 2 in the case of a domestic issuer, or by Article 28-3, paragraphs 3 and 4 in the case of a foreign issuer.
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Article 31
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In addition that the TWSE must reject the application of a domestic issuer, foreign issuer or its subordinate company for the listing of its stock in any of the circumstances under subparagraphs 7, 8 and 9, the TWSE may also reject the application of a domestic issuer or a foreign issuer for the listing of stocks at the TIB if any of the following circumstances exists and the TWSE decides against listing, despite that it meets the requirements on listing set forth in Article 29:
- Has the circumstances described in Article 156, paragraph 1, subparagraphs 1 and 2 of the Securities and Exchange At, or its act is false, fraudulent or illegal to such an extent the price of the securities after listing may be affected which is therefore likely to jeopardize the market order or public interest.
- Fails to have its finance or business independently separated from another person’s.
- Is involved in a major labor and management dispute or environmental pollution incident that would affect the company’s normal finance and business operation, and no improvement has been made.
- Is found to have major irregular transactions, and no improvement has been made.
- Has failed to effectively implement its written accounting system, internal control system or internal audit system, or failed to prepare its financial reports in accordance with applicable laws and the general accepted accounting principle, and the failure is significant.
- It is experiencing a serious decline in the business activities it engages in.
- The director, general manager or real responsible person of the applicant or its incumbent director, general manager or real responsible person has been in breach of the principle of honesty and good faith in the most recent years.
- The board of directors of the applicant comprises less than five members, only same-sex members, or less than three independent directors, or its independent directors take less than one-third of the seats of the board; its board of directors is unable to perform its duties independently; or it fails to establish the compensation committee in accordance with Article 14-6 of the Securities and Exchange Act and its applicable rules. Further, at least one of its elected independent directors must be a professional in accounting or finance. The above shall, however, not apply if a domestic issuer, prior to application for the listing of stocks and its stocks have not been registered with the TPEx for trading, has undertaken to complete the election of its independent directors and establish its functional committees no later than commencement of listing and trading of its stocks.
- Where the applicant has registered its stocks at the TPEx for trading during the fiscal year of its application for the listing and its most recent fiscal year, since its listing date, its incumbent directors and shareholders holding more than 10 percent of its total issued shares have not traded any stocks issued by the applicant at the TPEx market. The above shall, however, not apply if it engages in prelisting public sale in accordance with Article 36 or has other legitimate reasons.
- Where the shares of the applicant are held by a TWSE/TPEx listed company and it meets one of the following conditions, the shares transfer by the TWSE/TPEx listed company for purpose of reducing its shareholding in the applicant in the most recent three years was not done by having the company’s existing shareholders to subscribe the shares on a priority basis or otherwise in a manner not detrimental to the shareholders’ equity of the company:
- The applicant is an existing or newly incorporated company to which business or assets will be transferred by a TWSE/TPEx listed company after split.
- The applicant is a subsidiary of a TWSE/TPEx listed company in which the TWSE/TPEx listed company has reduced its direct or indirect shareholding by a total of 20 percent or more within the three years prior to the application for listing.
- Is otherwise deemed by the TWSE as inappropriate for listing due to business cope, nature or special circumstances.
The provisions under all the subparagraphs of the preceding paragraph shall apply until the day before the day when its listing contract takes effect.
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