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Amended Article

Title:

Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings  CH

Amended Date: 2018.07.09 
Categories: Primary Market > Review
Article 10     An application for initial listing of stock filed by an issuing company shall not be approved unless and until shares representing all of the number of shares held by each of the following persons of the issuing company specified in the application for listing (with the total number of such shares being not less than the ratio specified in paragraph 2 of this Article), less those offered for public sale, have been placed in central custody with a central securities depository enterprise incorporated with the approval of the Competent Authority; provided however, that if the number of shares represented by shares placed in central custody pursuant to the above is less than the ratio specifies in paragraph 2 of this Article, the shortage shall be made up by other shareholders:
  1. Where the application for listing is filed in accordance with the provisions of Article 4, 6, 16, or Article 20, paragraph 1, Article 20-1, or Article 20-2 of these Rules, its directors, and the shareholders holding 10 percent or greater of the total number of issued shares of the issuing company.
  2. Where the application for listing is filed in accordance with the provisions of Article 5 or Article 20, paragraph 3 of these Rules or where the applicant is an information software enterprise, its personnel who shall handle central custody of the stock are as listed in the items below. However, this restriction shall not apply where shareholding of a recommending securities firm during the period of registration as emerging stock exceeds 5 percent of the total issued shares of said issuing company as a result of subscription or trading of operating securities during the emerging stock trading period.
    1. Where the applicant is a creative enterprise or information software enterprise, its directors, shareholders holding 5 percent or greater of the total number of issued shares, and/or shareholders whose equity investment is made in the form of patent rights or technical know-how, and who are working for the issuing company and hold 0.5 percent or greater of the total number of shares or 100,000 or more shares as of the date on which the application for listing is filed.
    2. Where the applicant is a technology enterprise, its president, research and development supervisor, and personnel mentioned in the preceding item.
    The total number of shares with respect to the shares to be placed in central custody by the issuing company under the preceding paragraph refers to the aggregate sum of common shares that have already been publicly offered and issued, as stated on the listing application documents,; the total ratio of shares to be placed in central custody by the issuing company shall be calculated as set forth below:
  1. Where the total number of shares is 30 million or less, shares representing 25 percent thereof shall be placed in central custody.
  2. Where the total number of shares is more than 30 million but 100 million or less, shares representing 20 percent of the portion of shares in excess of 30 million shares shall be placed in central custody in addition to those required under the preceding item.
  3. Where the total number of shares is more than 100 million but 200 million or less, shares representing 10 percent of the portion of shares in excess of 100 million shall be placed in central custody in addition to those required under the preceding item.
  4. Where the total number of shares is more than 200 million, shares representing 5 percent of the portion of shares in excess of 200 million shall be placed in central custody in addition to those required under the preceding item.
    The remaining shares after deducting those required for the public offering, as referred to in paragraph 1, include the following:
  1. From the date of application for initial listing to the listing date, all new shares obtained through capital increase for which amendment registration has been completed with the Ministry of Economic Affairs, as well as any shares that have come to be held for any other reason; for any shares that have not yet been obtained by the listing date, an undertaking shall be made to place the shares in central custody after obtaining them.
  2. From among the old shares provided by directors and shareholders of the issuer for an overallotment (greenshoe) option for the securities underwriter, any shares that were not actually sold in exercise of the overallotment option and that have been returned by the securities underwriter.
    One-half of the shares placed in central custody by directors and shareholders pursuant to the provisions of paragraph 1 of this Article may be withdrawn only after the end of a 6-month period starting from the listing date thereof; all the shares may be withdrawn in full only after the end of a one-year period starting from the listing date thereof. However, a company applying for listing pursuant to Article 4, paragraphs 2 and 4, or a technology enterprise applying for listing pursuant to Article 5, and to Article 20, paragraph 3, may withdraw one-fourth of the shares only after the end of a 6-month period starting from the listing date thereof, and may further withdraw one-fourth of the shares every 6 months afterwards. All the shares in full only after the end of a two-year period starting from the listing date thereof.
    For an issuing company that applies for listing under the provisions of Article 4, where the total number of its shares required to be placed in central custody is assessed to exceed 50 percent of the issued shares of the issuing company, and the issuing company has paid-in capital of at least NT$30 billion, if the portion of the number of shares required to be placed in central custody exceeding the above-stated 50 percent of issued shares has been pledged to a financial institution by the director or shareholder of the issuing company who holds the shares for purposes of guaranteeing financing for the company or for him/herself, evidentiary documents furnished by the financial institution may be substituted for shares required to be placed in central custody; provided, if the pledge is released during the custody period, the director or major shareholder shall deposit the same amount of shares into central custody; or, if the subject of the pledge is disposed by the financial institution, the issuing company shall contact other directors or major shareholders to deposit the same amount of shares into central custody.
    Directors and shareholders shall not rescind the custodial agreement during the custody period. Shares and certificates in central custody shall not be transferred or pledged. The validity of central custody shall not be affected by a change of the identity of the holders of shares in central custody
    The provisions of paragraph 1 of this Article shall not apply to directors and shareholders of government authorities, government-owned enterprises, or which have obtained an approval from the authority in charge of the enterprise concerned for the sale of the shares held by them and have been determined to be inappropriate to place such shares in central custody.
    The total ratio of shares to be placed in central custody as specified in paragraph 2 of this Article shall not apply to government-owned enterprises.
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