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Article 9
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A lead underwriter of securities shall publish a competitive auction announcement in daily newspapers on the first day on which public bids are accepted. The content of said announcement shall be reported in hardcopy and electronic media to the Taiwan Securities Association three business days before the commencement date of the tender, and shall include the items in the following subparagraphs:
- name of the security;
- names, addresses, and telephone numbers of the underwriters;
- method, time period, and site of the bidding;
- date, time, and site of the opening of the bids;
- minimum offering price, minimum bidding unit, and maximum bid quantity per bid form;
- total quantity of securities to be put up for underwritten distribution; number of units expected to be sold via overallotment; total number of units retained for their own accounts by the securities underwriters; the total number of units being offered for competitive auction, and the amount of the bid deposit and the circumstances under which it may be confiscated;
- the maximum quantity of securities that may be allocated to each successful bidder;
- parties from whom competitive auction bids will be accepted, and the provisions of Articles 35 and 36 shall be specified;
- matters relating to the collection of bid processing fees and award processing fees by securities underwriters;
- any statutory restrictions upon holding percentages as may be set forth in other laws or regulations with respect to the industry to which the issuer belongs (please list these on the bid form);
- if a bidder fills out and submits multiple bid forms for the same competitive auction, or has multiple competitive auction cases for which bidding closes on the same day, when the bidder submits a bid to participate in any one or more of those cases, funds shall be deducted from the bidder's bank deposit for the sum total of the bid deposits and bid processing fees for all of the bid forms submitted by the bidder;
- the method of disclosure of the prospectus, also specifying that the prospectus discloses the tentatively set offering price, and specifying the method for querying the subsequently set offering price;
- in the event the total number of securities bid for in valid bids is insufficient to cover all the securities offered through competitive auction in an underwriting case involving the initial listing of shares on a stock exchange or an OTC market, so that price setting cannot be completed, the TWSE will not open the bids, and the brokers shall, on the third business day following the bid closure date, make no-interest refunds to the bidders of the bid deposits and of the bid processing fees less the relevant handling fees;
- other supplemental items that must be disclosed in order to safeguard the public interest and investors.
In an underwriting case involving an initial listing on a stock exchange or an OTC market, the lead underwriter shall submit the timetable for the procedures and a declaration by the issuer that it has already held a roadshow in accordance with TWSE or TPEx rules. If a declaration is not submitted or the TWSE or TPEx notifies the Taiwan Securities Association that the issuing company has failed to hold a roadshow in accordance with regulations, the competitive auction shall be postponed.
The maximum quantity of securities that may be allocated to each successful bidder referred to in paragraph 1 subparagraph 7 shall be taken as the the maximum bid quantity per bid form referred to in paragraph 1, subparagraph 5. In an underwriting case involving an initial listing on a stock exchange or an OTC market, the minimum bidding unit under paragraph 1, subparagraph 5 shall be capped at 5,000 shares.
The amount of the bid deposit under paragraph 1, subparagraph 6 shall be limited to an amount from 30 percent to 60 percent of the bid amount.
The maximum quantity allocated to each successful bidder, as referred to in subparagraph 7 of paragraph 1, shall not exceed 10 percent of the portion of the offering put up for public sale to outside parties. If it is an underwriting case involving an initial listing on a stock exchange or an OTC market, the lead underwriter may lower the 10 percent cap on the maximum quantity allocated to each successful bidder according to the circumstances in the given case.
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Article 33
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When an underwriter conducts public sale to outside parties partly by competitive auction and partly by public subscription, the underwriter shall carry out the following matters after the bid opening date:
- Day One:
- File the underwriting contract for registration with the Taiwan Securities Association.
- Send award notifications, prospectuses, and payment due notices.
- Refund bid deposits for unsuccessful and disqualified bids.
- Day Two:
- Publish underwriting announcement.
- Deadline for successful bidders' payment of the award price and award processing fee to the designated bank.
- Public subscription commencement date.
- Day Three: Date of deduction of successful bidders' award prices and award processing fees. Broker's bank undertakes matters regarding the deduction of the successful bidders' award prices and award processing fees.
- Day Four:
- Date of settlement of award prices, bid processing fees, award processing fees, and confiscated deposit prices.
- Public subscription period closes.
- Deadline for subscriber's payment of subscription processing fees, subscription payments, and postage expenses for lottery winner notification to the designated bank.
- Day Five: Date of deduction of subscription processing fees, subscription payments, and postage expenses. Broker's bank undertakes matters regarding deduction of subscribers' subscription processing fees, subscription payments, and postage for lottery winner notifications.
- Day Six: Date of public drawing of lots. TWSE undertakes the public drawing of lots. TWSE produces and sends a report of winner information to each broker. TWSE compiles and reports the information to the lead underwriter for provision to subscribers for their review.
- Day Seven:
- Brokers make no-interest refunds to non-lottery winners of bid deposits and prepaid postage; the subscription processing fees of non-lottery winners are not returned.
- Day Seven: Date of settlement of subscription processing fees, subscription payments, and postage expenses.
- Underwriters shall send lottery winner notifications, prospectuses (or subscription forms), and other relevant materials to lottery winners.
- Issuer applies to the TWSE or the TPEx for a securities listing on a stock exchange or OTC market.
- Day Eight: Specified parties make payment (the lead underwriter shall ascertain prior to 12 o'clock noon on that day whether the specified parties have made payment of the price) or underwriters carry out underwriting on standby commitment basis.
- Day Nine:
- Shareholders' register is completed.
- Issuer delivers certificates of payment to the Taiwan Depository & Clearing Corporation, or company applying for listing on a stock exchange or OTC market delivers shares to the Taiwan Depository & Clearing Corporation.
- Listing of securities on a stock exchange or OTC market is publicly announced.
- Day Ten: Securities are listed on the stock exchange or OTC market.
If any of the dates set forth in any subparagraph of the preceding paragraph falls on a weekend, regular holiday, or bank holiday, it shall be postponed by one day, and the dates that follow shall be postponed accordingly.
The dates specified under paragraph 1 may be changed if necessary by applying to the Taiwan Securities Association for approval.
The award price referred to in paragraph 1 subparagraphs 2 and 3 shall be the purchase price for the securities, less the bid deposit as prescribed in Article 12 paragraph 2. In the event that the successful bidder fails to fulfill his payment obligation within the specified time period, the securities underwriter may confiscate the bid deposit, and shall subscribe on its own account, at the price offered to said successful bidder, to the units that were to have been allocated to said successful bidder.
The procedures related to the allocation of securities by competitive auction by securities firms under paragraph 1 shall be separately prescribed by the Taiwan Securities Association.
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Article 34
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When an underwriter conducts public sale to outside parties entirely by competitive auction, the underwriter shall carry out the following matters after the bid opening date:
- Day One: File the underwriting contract for registration with the Taiwan Securities Association. Begin mailing notifications of award, prospectuses, and payment due notices. Refund bid deposits for unsuccessful and disqualified bidders.
- Day Two:Publish underwriting announcement; deadline for successful bidders' payment of the award price and award processing fee to the designated bank.
- Day Three: Date of deduction of award prices and award processing fees. Broker's bank undertakes matters regarding the deduction of the successful bidders' award prices and award processing fees.
- Day Four: Date of settlement of award prices, bid processing fees, award processing fees, and confiscated deposit prices. Issuer applies to the TWSE or the TPEx for a securities listing on a stock exchange or an OTC market.
- Day Five: Specified parties make payment; underwriter carries out underwriting on standby commitment basis.
- Day Six: Compilation of related registers is completed. Announcement of securities listing on a stock exchange or an OTC market.
- Day Seven: Securities are issued and listed on a stock exchange or an OTC market.
In a secondary distribution, the procedures set forth in subparagraphs 6 and 7 under the preceding paragraph, which are connected with application for listing of securities on a stock exchange or an OTC market, need not be carried out.
Where any of the dates set forth in the preceding paragraph falls on a weekend, regular holiday, or bank holiday, it shall be postponed by one day, and the dates that follow shall be postponed accordingly.
The dates specified under paragraph 1 may be changed if necessary by applying to the Taiwan Securities Association for approval.
The award price referred to in paragraph 1, subparagraphs 2 and 3 shall be the purchase price for the securities, less the bid deposit as prescribed by Article 12 paragraph 2. In the event that the successful bidder fails to fulfill his payment obligation within the specified time period, the securities underwriter may confiscate the bid deposit, and shall subscribe on its own account, at the price offered to said successful bidder, to the units that were to have been allocated to said successful bidder.
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