|
Article 18
|
Approval from the Competent Authority is required for the operation of any securities finance enterprise, centralized securities depository enterprise, or any other securities-related service enterprise.
Regulations governing the conditions for establishment, application and approval procedures, finances, operations, management, and other required matters for compliance with respect to the enterprises referred to in the preceding paragraph shall be prescribed by the Competent Authority.
|
|
Article 20
|
During the public offering, issuance, private placement, or trading of securities, there shall be no misrepresentation, fraud, or any other act sufficient to mislead other persons.
Financial reports and financial and business documents filed or publicly disclosed by an issuer in accordance with this Act shall contain no misrepresentation or concealment.
Anyone who violates the provisions of paragraph 1 shall be liable for compensation for damage sustained by bona fide acquirers or sellers of the securities.
The principal who engages a securities broker to purchase or sell securities as a commission agent shall be deemed as an "acquirer" or "seller" for the purpose of the preceding paragraph.
|
|
Article 32
|
If there is any misrepresentation or concealment in the material content of the prospectus referred to in the preceding Article, the following persons, within the scope of their responsibilities, shall be jointly and severally liable with the issuer to any bona fide counterparty for compensation for damage resulting therefrom:
1. The issuer and its responsible person(s).
2. Any employees of the issuer who has signed and affixed their seal on the prospectus to certify its accuracy in whole or in part.
3. Any underwriter of the securities.
4. Any CPA, lawyer, engineer, or any professional or technical person who has signed or affixed their seal to certify in whole or in part or to present their opinion on the correctness of the prospectus.
With the exception of the issuer, the persons referred to in subparagraphs 1 through 3 of the preceding paragraph shall not be liable for compensation if they can prove that they exercised all due diligence, and that they had good cause to believe, with respect to portions of materials not certified by a person referred to in subparagraph 4, that there was no misrepresentation or concealment in the material content, or that they had good cause to believe, with respect to any certified portion, that it was true. The persons referred to in subparagraph 4 of the preceding paragraph also shall not be liable if they can prove that they exercised reasonable investigation and had good cause to believe that their certification or opinions were accurate.
|
|
Article 44
|
A securities firm must obtain permission and issuance of a license from the Competent Authority before operating a securities business. The operation of securities business by persons other than securities firms is prohibited.
Permission from the Competent Authority shall be required for the establishment of branches by a securities firm.
Permission and issuance of a license from the Competent Authority shall be required for a foreign securities firm to establish branches in the Republic of China.
Standards for the establishment of securities firms governing matters including the conditions for the establishment of securities firms and branches thereof, the types of business in which they may engage, application procedures, documents required to be submitted, and regulations governing their finances, operations, and other required matters for compliance shall be prescribed by the Competent Authority.
The Competent Authority shall consult with the Central Bank of China when it adopts or amends provisions of the regulations referred to in the preceding paragraph that relate to foreign exchange business.
|
|
Article 96
|
Except as provided in this Act, no person may engage in the operation of a business similar to that of a centralized securities exchange market. This shall also apply to the provision of premises or facilities for such purposes.
|
|
Article 155
|
The following acts are prohibited with respect to securities listed on a stock exchange:
1. Placing an order to trade or a quote to trade on a centralized securities exchange market and failing to perform settlement after the trade is executed, where sufficient to affect the market order.
2. (Deleted)
3. Conspiring with another party in a scheme in which one party sells or buys a certain security at an agreed price while the other party buys or sells it in a corresponding trade(s), with the intent to inflate or deflate the trading price of that security on the centralized securities exchange market.
4. Continuously buying a certain security at high prices or selling it at low prices oneself or under the name of another with the intent to inflate or deflate the trading price of that security on the centralized securities exchange market, with a likelihood that market prices or market order will be affected.
5. Continuously placing orders for trades or quotes for trades and completing corresponding trades oneself or under the name of another, with the intent to create an impression of brisk trading in a certain security on the centralized securities exchange market.
6. Spreading rumors or false information with the intent to affect the trading prices of securities traded on the centralized securities exchange market.
7. Directly or indirectly engaging in any other act of manipulation to affect the trading prices of securities traded on the centralized securities exchange market.
The provisions of the preceding paragraph shall apply mutatis mutandis to trades conducted on the over-the-counter market.
Persons who violate the preceding two paragraphs shall be liable to compensate the damage suffered by bona fide buyers or sellers of the securities.
The provisions of paragraph 4 of Article 20 of this Act shall apply mutatis mutandis to the preceding paragraph.
|
|
Article 157
|
In the event that any director, supervisor, managerial officer, or shareholder holding more than ten percent of the shares of a stock issuing company sells listed stock of the company within six months after acquiring it, or repurchases listed stock of the company within six months after selling it, the company shall claim for the disgorgement of any profit therefrom.
If the board of directors or the supervisors of the company fail to exercise the right of claim for disgorgement under the preceding paragraph on behalf of the company, its shareholders may request the directors or supervisors to exercise the right of claim within thirty days. If the directors or supervisors do not exercise that right within that deadline, the requesting shareholders may exercise the right of claim under the preceding paragraph on behalf of the company.
If the directors or supervisors fail to exercise a claim under paragraph 1, they shall be jointly and severally liable to the company for compensation for any resultant damage suffered by the company.
The right of claim under paragraph 1 shall be extinguished if not exercised within two years from the date on which the profit is obtained.
The provisions of paragraph 3 of Article 22-2 hereof shall apply mutatis mutandis to paragraph 1 of this Article.
This Article shall apply mutatis mutandis to other securities with equity characteristics issued by a company.
|
|
Article 157-1
|
Upon actually knowing any information of a company that issues stock that would have a material impact on its stock price, after the information is precise, and prior to the public disclosure of such information or within 18 hours after its public disclosure, the following persons shall not buy or sell, themselves or in the name of another, any stock or other securities with equity characteristics of that company that are listed on an exchange or traded over-the-counter:
1. A director, supervisor, or managerial officer of the company, or a natural person designated to exercise powers as representative pursuant to Article 27, paragraph 1 of the Company Act.
2. A shareholder holding more than ten percent of the shares of the company.
3. Anyone who has learned the information based on occupation or a control relationship.
4. Anyone who has lost the status under any of the preceding three subparagraphs for a period of less than six months.
5. Anyone who has learned the information from any of the persons in the preceding four subparagraphs.
Upon actually knowing any information of a company that issues stock that would have a material impact on its ability to pay principal or interest, after the information is precise, and prior to the public disclosure of such information or within 18 hours after its public disclosure, the persons listed in the preceding paragraph shall not sell, themselves or in the name of another, any non-equity corporate bonds of that company that are listed on an exchange or traded over-the-counter.
Persons in violation of the provisions of paragraph 1 or the preceding paragraph shall be liable, to trading counterparties who on the day of the violation made an opposite trade with bona fide intent, for damages in the amount of the difference between the buy or sell price and the average closing price for ten business days after the date of public disclosure. The court may also, upon the request of the trading counterparty who made an opposite trade with bon fide intent, treble the damages payable by the violator if the violation is severe. The court may reduce the damages if the violation is minor.
The persons referred to in subparagraph 5 of paragraph 1 shall be jointly and severally liable with the persons referred to in subparagraphs 1 through 4 of paragraph 1 who provided the information for the damages referred to in the preceding paragraph. However, if the persons referred to in subparagraphs 1 through 4 of paragraph 1 who provided the information had good cause to believe the information had already been publicly disclosed, they shall not be liable for damages.
The phrase "information that would have a material impact on its stock price" in paragraph 1 shall mean information relating to the finances or businesses of the company, or the market supply and demand of those securities, or to a public tender offer, the specific content of which would have a material impact on its stock price, or would have a material impact on the investment decision of a reasonably prudent investor. Regulations governing the scope of the information, the means of its disclosure and related matters shall be prescribed by the Competent Authority.
Regulations governing the scope of information that would have a material impact on the ability of the issuing company to pay principal or interest as mentioned in paragraph 2, the means of its disclosure, and related matters shall be prescribed by the Competent Authority.
The provisions of paragraph 3 of Article 22-2 shall apply mutatis mutandis to subparagraphs 1 and 2 of paragraph 1 of this Article; the same shall apply with respect to those who have lost the status for a period of less than six months. The provisions of paragraph 4 of Article 20 shall apply mutatis mutandis to the trading counterparty referred to in paragraph 2 of this Article.
|
|
Article 171
|
A person who commits any of the following offenses shall be punished with imprisonment for not less than three years and not more than ten years, and in addition thereto, a criminal fine of not less than NT$10 million and not more than NT$200 million may be imposed:
1. Violation of paragraph 1 or paragraph 2 of Article 20, paragraph 1 or paragraph 2 of Article 155, or paragraph 1 or 2 of Article 157-1.
2. A director, supervisor, managerial officer or employee of a company that has issued securities under this Act directly or indirectly causes the company to conduct trades that are disadvantageous and are inconsistent with regular business practice, causing substantial damage to the company.
3. A director, supervisor, or managerial officer of a company that has issued securities under this Act, with the intent to procure a benefit for themselves or for a third person, acts contrary to their duties or misappropriates company assets, thus causing damage of NT$5 million or more to the company.
If the value of property or property interests gained by the commission of an offense under the preceding paragraph is NT$100 million or more, a sentence of imprisonment for not less than seven years shall be imposed, and in addition thereto, a criminal fine of not less than NT$25 million and not more than NT$500 million may be imposed.
A person who commits an offense under paragraph 1, subparagraph 3, causing damage of less than NT$5 million to the company, shall be punished under Articles 336 and 342 of the Criminal Code.
A person who commits an offense under the preceding 3 paragraphs and subsequently voluntarily surrenders themselves, if they voluntarily hand over the proceeds of the crime in full, shall have their punishment reduced or remitted. If, in addition, another principal offender or a joint offender is captured as a result, their punishment shall be remitted.
A person who commits an offense under paragraphs 1 to 3 and confesses during the prosecutorial investigation, if they voluntarily hand over the proceeds of the crime in full, shall have their punishment reduced. If, in addition, another principal offender or a joint offender is captured as a result, their punishment shall be reduced by one-half.
Where the value of property or property interests gained by a person through the commission of an offense under paragraph 1 or 2 exceeds the maximum amount of the criminal fine, the fine may be increased within the scope of the value of the property or property interests gained; if the stability of the securities market is harmed, the punishment shall be increased by one-half.
If the proceeds of a crime committed under paragraphs 1 to 3 belong to the offender or were obtained by a natural person, juristic person, or unincorporated body other than the offender under a circumstance set out in Article 38-1, paragraph 2 of the Criminal Code, the proceeds shall be confiscated, unless they shall be returned to a victim, third person, or person who is entitled to claim for damages.
A person who violates Article 20, paragraph 1 or 2, Article 155, paragraph 1 or 2, or Article 157-1, paragraph 1 or 2, as applied mutatis mutandis under Article 165-1 or 165-2, shall be punished under the provisions of paragraph 1, subparagraph 1, and of paragraph 2 up to the preceding paragraph hereto.
The provisions of paragraph 1, subparagraphs 2 and 3, and paragraphs 2 to 7 shall apply to the directors, supervisors, managerial officers, or employees of a foreign company.
|
|
Article 174
|
A person who commits any of the following offenses shall be punished with imprisonment for not less than one year and not more than seven years, and in addition thereto, a criminal fine of not more than NT$20 million may be imposed:
1. Making of false statements on the application materials required under Article 30, Article 44, paragraphs 1 to 3, or Article 93, or Article 30 as applied mutatis mutandis under Article 165-1 or 165-2, of this Act.
2. Making and dissemination to the public of false information with regard to the market value of securities or important matters relating to approval of subscription or offering.
3. The violation of paragraph 1 of Article 32 by an issuer, its responsible personnel or employees, in instances where no applicable exemption from liability is established pursuant to paragraph 2 of the same Article.
4. Any false statement in the content of any account book, form/statement, document, or other reference or report material an issuer or public tender offeror or related party thereof, a securities firm or its principals, securities association, stock exchange, or an enterprise referred to in Article 18, is required to provide pursuant to an order of the Competent Authority.
5. Any false statement in the content of any account book, form/statement, voucher, financial report, or other business document of any issuer, public tender offeror, securities firm, securities association, stock exchange, or an enterprise referred to in Article 18, required by law or by an order issued by the Competent Authority pursuant to law.
6. Any false statement in the content of a financial report under the preceding subparagraph by a managerial officer or accounting officer who signs or seals the financial report. However, the punishment may be reduced or remitted if the person has submitted a corrective opinion and provided evidence in a report to the Competent Authority before any other person has brought a complaint or the Competent Authority or a judicial agency has commenced an investigation.
7. With respect to an issuer or to trading in any specific securities, based on false information, making investment judgments, and expressing them by means of newspaper, written material, broadcast, film or other means.
8. Any director, managerial officer, or employee of an issuer who, in violation of laws or regulations, the articles of incorporation, or by acting beyond the scope of authority granted by the board of directors, loans company funds to a third party or uses company assets to provide security, a guarantee, or endorsement of a negotiable instrument for a third party, thereby causing substantial harm to the company.
9. Counterfeiting, altering, destroying, concealing, or obscuring working papers or relevant records or documents with the intent to impede inspection by the Competent Authority or investigation by a judicial agency.
A person who commits any of the following offenses shall be punished with imprisonment for not more than five years, and a criminal fine of not more than NT$15 million may be imposed or additionally imposed:
1. Issuance by a lawyer of a false or untrue opinion regarding any contract, report, or document of a company or a foreign company relating to the public offering, issuance, or trading of securities.
2. A certified public account, with respect to any material falsehood or error in a financial report, document, or information reported or published by a company or foreign company, failing to fulfill their audit duties and issuing a false report or opinion; or a CPA, with respect to a material falsehood or error in a financial report of company or a foreign company, failing to perform auditing in accordance with applicable laws and regulations and generally accepted audit principles, resulting in the failure to point out the material falsehood or error.
3. Violation of Article 22, paragraphs 1 to 3.
If the commission of an offense under the preceding paragraph severely affects the rights or interests of shareholders or harms the stability of the securities market, the punishment may be increased by one-half.
If a personnel member or employee of an issuer commits an offense in subparagraph 6 of paragraph 1, and the offense is minor, the punishment may be reduced.
The Competent Authority shall render a disposition suspending attestation work by a CPA who violates subparagraph 2 of paragraph 2.
If a foreign company is an issuer, any violation of paragraph 1, subparagraphs 2 to 9 by the foreign company or a director, managerial officer, employee, or accounting officer of the foreign company shall be punished under paragraphs 1 and 4.
A person who violates Article 22 as applied mutatis mutandis under Article 165-1 or 165-2 shall be punished under paragraphs 2 and 3.
|