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Amended Article

Title：

Criteria Governing the Particulars to be Recorded in the Prospectus for the Establishment by Public Offering of Financial/Insurance Enterprises  CH

Amended Date： 1999.02.23 
Article Content Chapter Content Search Article No. Search Legal Basis Amended Article Legislative History Chinese
Article 1     These Criteria are adopted pursuant to the provisions of Article 30 paragraph 2 of the Securities and Exchange Law (SEL)
Article 2     The basic principles for the preparing of a prospectus are as follows:
  1. The content of the prospectus must be truthful and precise. The wording and descriptions shall be concise and easy to understand. No falsehood or omission is allowed therein.
  2. The content of the prospectus must be up to date. Before the prospectus is printed, transactions or other events that are sufficient to influence the judgment of interested parties shall be disclosed.
Article 3     The inside of the front cover of the prospectus shall be printed with the following items in sequential order:
  1. Name and seal of the preparatory office.
  2. Authorized capital amount, types of the current issue of new shares, number of shares, price, conditions of issue, the number of shares subscribed by the promoters, and number of shares publicly offered.
        
  3. The following words printed conspicuously:
    1. The approval of the public offering may not be used to advertise verification of the application or guarantee of the value of the securities.
    2. If the prospectus contains falsehoods or omissions, the representative of the preparatory office and others who have signed/sealed the prospectus shall be held liable by law.
    3. Where the shares have not yet been listed on a securities exchange, and have not yet been bought or sold at a place of business operations of a securities firm in accordance with Article 3 of the Operation Bylaws of the Republic of China Over-the-Counter Securities Exchange for Securities Trading on the Over-the-Counter Market, the investor shall make a careful judgment before investing.
    4. Printing date.
    When prepared for an application for establishment by offering, the prospectus shall note on its cover that it is a draft version for the purposes of such application.
Article 4     The inside of the back cover of the prospectus shall be printed with the following items relevant to the current issuance in sequential order:
  1. Prospectus distribution plan: describing the places for displaying the prospectus, method of distribution, and method for requesting and obtaining the prospectus.
  2. Name, address, and telephone number of the securities underwriter.
  3. Name, address, and telephone number of the share certification institution.
  4. Name, address, and telephone number of the institution handling the registration of shares transfer.
  5. Name of the certified public accountant (CPA) and lawyer who has provided a review opinion; name, address, and telephone number of the [accounting and law] offices; name, address, and telephone number of actuarial personnel that the insurance company has yet to disclose.
  6. Name, title, and contact telephone number of the spokesperson.
  7. Web address of the company.
Article 5     The inside cover of the prospectus shall be signed/sealed by the representative of the preparatory office. The prospectus should also be signed/sealed by the CPAs, lawyers, and securities underwriters and their responsible persons in the portions of the prospectus for which they are responsible.
    In the case of insurance companies, in addition to acting in accordance with the provisions of the preceding paragraph, the prospectus shall also be signed/sealed by the actuaries in the portions of the prospectus for which they are responsible.
Article 6     The content of a prospectus shall include the following items:
  1. Summary of Preparation for Establishment: Including preparatory process, organizational structure and shareholding dispersal status.
  2. Operation Summary: Including business scope, fixed assets, use of share capital and important contracts.
  3. Business Plan: Including industry's general status and market analysis, business objectives, major contents of the business plan statement, and real estate acquisition plan or long-term investment plan.
  4. Financial Summary: Including CPA auditing status and other necessarily supplemental and explanatory items
  5. Financial Projection and Analysis: Including financial projection and financial projection analysis.
  6. Special Items to be included.
  7. Important Resolutions, Articles of Incorporation, and Relevant Laws and Regulations.
Article 7     The prospectus shall include all items required under these Criteria, as well as a table of contents, page numbering, and a summary (Attachment 1). If any required information is unavailable or may be omitted per the approval of the Securities and Futures Commission (SFC), the notation "N/A" or "Omitted" shall be added next following such items.
    Where an item of required information reoccurs in the prospectus, it may occur in full only in one section and occur as a referenced page number in all other sections.
Article 8     The preparatory process for establishment shall include the following items:
  1. Date of each promoters meeting and the date and reference number of the establishment approval granted by the Ministry of Finance (MOF).
  2. Locations of the head office and branches.
  3. Record of important events after the establishment of the preparatory office.
Article 9     The organizational structure shall include the following items:
  1. Organization system: Stating the internal division of labor, and the business scope of the main departments.
  2. Diagram of affiliate enterprises: Stating the relationship between the company and each affiliate, number of mutually held shares, number of shares held, and actual amount invested.
  3. The intended general manager, deputy general manager, assistant managers, and head of each department: (Attachment 2)
    1. Name, experience and education, number and nature of subscribed shares: Stating the name, main experience and education, current position, date of appointment (or projected appointment), and number of company's shares subscribed by self, spouse, and minor children.
    2. Where among the general manager, deputy general manager, or assistant managers there exists a relationship that is spousal in nature or within the second degree of kinship, the position, name, and relationship of such persons shall be listed.
  4. Promoters:
    1. Name, experience and education, and number and nature of shares subscribed: Stating the name, main experience, education, intended position to be held in the bank, current position, and number of company's shares subscribed by self, spouse, and minor children of the promoters whose percentage of share subscription ranks among the top fifty. Where the promoter is a juristic person, the name of such person and any shareholder who has a 10 percent shareholding or whose shareholding ranks in the top ten among shareholders shall be listed (Attachment 3).
    2. Disclosure of important transactions: According to No. 6 of the ROC Statements of Financial Accounting Standards, any major transactions among the promoters or their related parties and the preparatory office shall be disclosed. For a property transaction, the nature and location of the transacted item and the method for determining the transaction price shall also be disclosed. For a purchased property, if the property was purchased by the promoters or their related parties within two years before it was sold, the purchasing costs incurred by the promoters or their related parties shall also be explained.
  5. Proposed annual remuneration to be paid to directors, supervisors, general manager, deputy general manager, assistant managers, and head of each department:
    1. Proposed transportation allowances and remuneration paid to each director and supervisor; if a director concurrently serves as a manager, their remuneration for each of the positions shall be disclosed separately.
    2. The total sum of the salary, reward, special allowance, and bonus agreed to be paid to the general manager, deputy general manager, assistant managers, and head of each department.
    3. For remuneration other than that referred to in the preceding two sub-subparagraphs agreed to be paid to the director, supervisor, general manager, deputy general manager, assistant managers, and head of each department, such as payments relating to providing of automobile and housing or any other exclusively personal expenses, the name and position of such persons, the nature and cost of the provided asset, the actual or fair-market-value of the rental, and any other payments shall be disclosed.
    The "affiliate enterprises" referred to in subparagraph 2 of the preceding paragraph are provided for in Article 369-1 of the Company Law.
Article 10     A breakdown of the shareholding dispersal status shall include the following items:
  1. Shareholding Structure: Broken down by the type of promoter based on the proportion of shares subscribed. (Attachment 4)
  2. Shareholding Dispersal Status: Broken down by the number and proportion of promoters based on the range of the number of shares subscribed. (Attachment 5)
Article 11     The scope of business shall set forth the major contents of the business items engaged in.
Article 12     The fixed assets shall include the following items:
  1. Self-owned Assets: Setting forth the names, number, acquisition dates and acquisition cost of the fixed assets that have been purchased or are to be purchased under an already signed contract if the purchase price of which is NT$5 million or more. The status of the fixed assets' use, insurance, encumbrances and any other restriction of rights shall also be disclosed. (Attachment 6)
  2. Rental properties:
    1. Capital lease: The standards and items to be disclosed are identical with the preceding Paragraph.
    2. Operating lease: Setting forth the names, number, lease term, annual lease amount, names of lessors, the current status of use, and other important agreed items. (Attachment 7)
Article 13     The status on use of the payments for shares shall include the following items:
  1. Each payment made up to the end of the previous month before the application for establishment by offering has been filed. (Attachment 8)
  2. The CPA's opinion regarding the results of the investigation into each of the payments referred to in the preceding paragraph and whether each payment complied with Article 13 of the Commercial Bank Establishment Criteria, Article 22 of the Industrial Bank Establishment and Management Regulations, Article 12 of the Insurance Company Establishment Criteria.
Article 14     The important contracts shall include important contracts likely to impact the investors' rights and interests that have already been signed, and shall include the parties, major content, restrictive provisions and the beginning and ending dates of the contracts. (Attachment 9)
Article 15     The industry summary and market analysis shall include the following items:
  1. Industry Summary: Stating the development of the financial/insurance industries, trends and competition with regard to all kinds of financial/insurance products.
  2. Market Analysis: Analyzing supply and demand in the financial/insurance markets, market segments, target markets, competition strategies, and advantageous and disadvantageous factors with regard to developmental outlook.
Article 16     The business objectives shall include the following items:
  1. Banks:
    1. The projected deposit amount for the future three years: Setting forth the projected deposit amount by nature of the deposit for the future three years. (Attachment 10)
    2. The projected credit extension amount for the future three years: Setting forth the projected credit extension amount by discount/loan, guarantee, and other types of credit extension for the future three years. (Attachment 11)
    3. The projected number of employees for the future three years: Setting forth projected number of employees by nature of job for the future three years. (Attachment 12)
    4. The projected amount of direct investment for the future three years: Industrial banks shall set forth the projected amount and proportion of direct investment by type of enterprise for direct investment for the future three years. (Attachment 13)
    5. The projected amount of financial bonds for issuance for the future three years: Industrial banks shall set forth the projected amount of financial bonds for issuance for the future three years.
  2. Insurance Companies:
    1. The projected income from each insurance fee for the future three years: Setting forth projected income from insurance fees by type of insurance operated for the future three years. (Attachment 14)
    2. The funds utilization plan for the future three years: Setting forth the projected amount and proportion of investment by category of funds for utilization for the future three years. (Attachment 15)
    3. The projected number of employees for the future three years: Setting forth the projected number of employees by nature of job for the future three years. (Attachment 16)
Article 17     The major contents of the business plan statement shall include the following items:
  1. Banks:
    1. business scope.
    2. business principles and policies.
    3. sites and facilities.
    4. departments and functions.
    5. personnel recruitment and training.
    6. business development plans.
    7. financial projection for the future three years.
  2. Insurance Companies: Setting forth items in the preceding sub-subparagraphs 1 through 7, and reinsurance policies for the future three years.
Article 18     The plan for acquisition of real properties or long-term investment shall set forth the name, nature, purpose of acquisition, and the planned acquiring price of the real properties or long-term investment.
Article 19     The CPA's audit shall include the CPA's audit report, balance sheet, profit and loss statement, cash flow statement and notes or attachments thereto as of the end of the month before the month in which the application for establishment by public offering was filed. If the promoters have not yet fully contributed their share capital as of such date, then the date as of which the information shall be included shall be until the date when the promoters have fully contributed their share capital.
Article 20     Financial summary and other necessary items to be supplemented:
  1. Subsequent matters: After the CPA has issued the audit report and before the publication date of the prospectus, should there occur any major incident likely to impact financial condition and operating results, it shall be properly disclosed and its impact explained.
  2. Others.
Article 21     The financial forecasts shall set forth the forecast balance sheet, income statement, and statement of cash flow for the future three years, and the basis or basic assumptions for the forecasts and an analysis of the likelihood of achieving them.
Article 22     Financial projection information and consolidated analysis
  1. With regard to the financial projection information for the future three years, banks shall, at a minimum, analyze the following items: (Attachment 17)
    2.     
    1. Financial Structure:
      1. Self-owned assets to risk-based assets ratio.
      2. Liabilities to assets ratio.
      3. Deposits to owners' equity ratio.
      4. Fixed assets to owners' equity ratio.
    2. Debt-paying Ability: Liquid reserves ratio.
    3. Operating Ability:
      1. Loans to deposits ratio.
      2. Past due loan ratio.
      3. Interest expenditure to interest income ratio.
      4. Total asset turnover rate.
      5. Amount of average business income per employee.
      6. Amount of average profit per employee.
    4. Profitability:
      1. Assets return ratio.
      2. Owners' equity return ratio.
      3. Net income ratio.
      4. Earnings per share.
  2. With regard to the financial projection information for the future three years, insurance companies shall, at a minimum, analyze the following items: (Attachment 18)
    1. Financial Structure:
      1. Liabilities to assets ratio.
      2. Ratios of each liability reserve to owners' equity.
      3. Real properties to new owners' equity.
      4. Liquidity ratio.
    2. Operating Ability:
      1. Funds utilization rate.
      2. Total assets' turnover rate.
      3. Expenses ratio
      4. Loss reserve ratio.
      5. Amount of average premium income per employee.
      6. Amount of average profit per employee.
    3. Profitability:
      1. Assets return ratio.
      2. Owners' equity return ratio.
      3. Net income ratio.
      4. Funds utilization return ratio.
      5. Profit per share.
    4. Business Stability
      1. Premium income volatility rate.
      2. Loss reserve ratio.
Article 23     The information regarding financial forecasts and analysis as set forth pursuant to the preceding two Articles shall be noted in conspicuous font as to whether they were prepared according to the provisions of No. 16 of the ROC Statements of Financial Accounting Standards, audited by an CPA pursuant to the provisions of No. 19 of the ROC Statements of Financial Auditing Standards, and noted as a forecast on each page.
Article 24     The special items to be included shall include:
  1. The status of compliance with additional conditions or corrective measures required by the MOF at the time of approval of the establishment.
  2. Expert Review Opinion:
    1. Commercial Banks: The major contents of review opinion by the CPA and lawyer given pursuant to Article 11 paragraph 1 subparagraph 11 of the Commercial Bank Establishment Criteria.
    2. Industrial Banks: The major contents of review opinion by the CPA and lawyer given pursuant to Article 20 paragraph 1 subparagraph 11 of the Industrial Bank Establishment and Management Regulations.
    3. Insurance Companies: The major contents of review opinion by the CPA and lawyer given pursuant to Article 10 paragraph 1 subparagraph 11 of the Insurance Company Establishment Criteria.
  3. Securities underwriter's evaluation report.
  4. Name and address of the bank receiving the share capital as agent, and the evidence that the promoters have fully contributed their share of capital in accordance with the relevant laws and regulations.
  5. The bank's plan for application to participate in depository insurance.
  6. Other necessary items to be supplemented and explained.
Article 25     The important resolutions, articles of incorporation, and relevant laws and regulations, shall include:
  1. Important resolutions: Setting forth the major contents of the promoters' meetings.
  2. Articles of Incorporation regarding shares offering.
  3. Articles of Incorporation of the company.
  4. Relevant laws and regulations:
    1. Articles 40, 20, 31, 32 and 174 of the SEL.
    2. Articles 41, 39, 40 of the CPA Law, and Article 37 paragraph 2 of the SEL.
    3. Article 36 and Article 37 paragraph 3 of the SEL.
        Articles 135, 136, 139, 141~145, and 147~155 of the Company Law.
        Banks shall add Article 25 paragraphs 1~3, and Articles 32, 33, 33-1, 127-1, and 50 of the Banking Law, Articles 2 and 3 of the Commercial Bank Establishment Criteria, or Articles 4, 13, 18 of the Industrial Bank Establishment and Management Regulations; insurance companies shall add Articles 139, 146-3 paragraph 3, 152 of the Insurance Law, Articles 3, 9~12, 14, 21 of the Insurance Industry Management Regulations, Articles 2 and 3 of the Insurance Company Establishment Criteria.
Article 26     For the establishment by offering of banks and insurance companies, prospectuses shall be prepared in accordance with these Criteria.
    For the establishment by offering of financial enterprises other than those referred to in the preceding paragraph, the SFC may designate these Criteria as applicable to the preparation of prospectuses.
Article 27     For the establishment by offering of financial or insurance companies, within 30 days after the service of the approval notice of the SFC, the revised prospectus shall be submitted to the SFC for recordation, and the target enterprise competent authority shall be notified as well.
Article 28     These Criteria shall take force on the date of promulgation.