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Article 27-1
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In a case involving an initial listing of common shares on a stock exchange or an OTC market, regulations governing the volume of securities that may be allocated to any single bidder are as follows:
- In a case in which the amount allocated for public subscription is adjusted to 30 percent or less under Article 21-1, the quantity of securities actually allocated to any qualified institutional investor or mainland area institutional investor shall not exceed 10 percent of the quantity underwritten by the allocating underwriters, or 100,000 shares, whichever is higher, provided that the combined quantity of securities actually allocated by the underwriters to any single bidder shall not exceed 10 percent of the portion of the securities put up for public sale to outside parties in the present offering. In a case in which the amount allocated for public subscription exceeds 30 percent, the quantity of securities actually allocated to any qualified institutional investor or mainland area institutional investor shall not exceed 5 percent of the quantity underwritten by the allocating underwriters, or 50,000 shares, whichever is higher, provided that the combined quantity of securities actually allocated by the underwriters to any single bidder shall not exceed 5 percent of the portion of the securities put up for public sale to outside parties in the present offering.
- In a case in which the amount allocated for public subscription is adjusted to 30 percent or less under Article 21-1, the quantity of securities actually allocated to any bidder other than a qualified institutional investor shall not exceed 5 percent of the quantity underwritten by the allocating underwriters, or 50,000 shares, whichever is higher, provided that the combined quantity of securities actually allocated by the underwriters to any single bidder shall not exceed 5 percent of the portion of the securities put up for public sale to outside parties in the present offering. In a case in which the amount allocated for public subscription exceeds 30 percent, the quantity of securities actually allocated to any bidder other than a qualified institutional investor shall not exceed 2 percent of the quantity underwritten by the allocating underwriters, or 20,000 shares, whichever is higher, provided that the combined quantity of securities actually allocated by the underwriters to any single bidder shall not exceed 2 percent of the portion of the securities put up for public sale to outside parties in the present offering.
The term "qualified institutional investors" in subparagraph 2 of the preceding paragraph means domestic and foreign institutional investors and foreign institutional investors, including domestic and foreign banks, insurance companies, bills finance companies, fund management companies, government investment institutions, government funds, mutual funds, unit trusts, investment trust enterprises, and trust enterprises.
The maximum combined quantity of securities allocated by an underwriter in accordance with paragraph 1, subparagraph 2 to any company that has underwriting business dealings with that underwriter shall not exceed 20 percent of the quantity of securities underwritten by that underwriter.
The phrase "any company that has underwriting business dealings with that underwriter" in the preceding paragraph means a company for which that underwriter has lead managed an offering within 12 months before the present offering is to be listed on a stock exchange or OTC market, or a company which that underwriter anticipates doing so within the coming three months.
When an underwriter arranges for specified parties to subscribe to undersubscribed shares or shares that subscribers fail to pay for after allotment, it is exempt from the restrictions of paragraph 1, but such subscriptions are still not allowed to exceed 10 percent of the quantity of securities underwritten by that underwriter, or 100,000 shares, whichever is higher, and the combined total of all shares allotted by the underwriter to the aforementioned specified parties shall not exceed 10 percent of the portion of the offering that is put up for public sale to outside parties.
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Article 31
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An underwriting case involving the offering of ordinary corporate bonds, financial bonds not involving stock equity, corporate bonds from which the detachable warrants have been detached, real estate asset trust beneficial interest securities; the secondary distribution of beneficial interest securities by a trustee institution; or the secondary distribution of asset-backed securities by a special-purpose company, may be undertaken entirely or partly by negotiated sale. The offering price shall be determined as prescribed by Article 30.
The underwriting of call (put) warrants shall be undertaken entirely by negotiated sale.
An underwriting case involving a secondary distribution by a public enterprise may be undertaken entirely or partly by negotiated sale if units are released to the general public. The method of allocation shall be determined by negotiations between the securities underwriter and the government agency that regulates the government-owned enterprise in question.
In an underwriting case involving an initial listing of shares in common stock on a stock exchange or OTC market through competitive auction, if an overallotment is exercised, those shares allocated via overallotment shall be sold by means of negotiated sale at an offering price determined in accordance with the provisions of Article 16, 17, or 18.
In an underwriting case involving a public enterprise (or any other party acting in accordance with the provisions of Articles 6 and 6-1 of the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings, or in accordance with the provisions of the Taipei Exchange Supplemental Provisions for Applications by Private Institutions Participating in Public Infrastructure Projects for Over-the-Counter Listing) that conducts an initial offering of shares in common stock on a stock exchange or an OTC market and allocates the entire amount of said shares through public subscription, if an overallotment is exercised, the overallotment may be handled by means of negotiated sale. The offering price shall be the same as that applying to shares allocated through public subscription.
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