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Amended Article

Title：

Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings  CH

Amended Date： 2025.06.09 
Categories： Primary Market > Review
Article Content Chapter Content Search Article No. Search Legal Basis Subordinate Legislation Amended Article Attachment Legislative History Chinese
4     Where an issuing company applying for the listing of its stock meets the criteria listed below, the TWSE will agree to list its stock:
  1. Duration of corporate existence: It has been incorporated and registered under the Company Act for at least three years at the time of the application for listing; provided, this restriction shall not apply to public (state-owned) enterprises or to privatized public enterprises.
  2. Paid-in capital: At the time it applies for listing, its paid-in capital is NT$600 million or more and the number of shares of its publicly offered and issued common stock is 30 million shares or more.
  3. Profitability: The profit before tax in its financial reports meets either of the following criteria, and it does not have any accumulated deficit in the final accounting for the most recent fiscal year. Where the shares have no par value or a par value other than NT$10, the company's net worth in the annual final accounts instead of the capital stock listed in the financial report is used to calculate the ratio in each of the following items, and at least half of the prescribed ratio in each item is reached:
    1. The profit before tax for the most recent two fiscal years represents 6 percent or greater of the share capital stated on the financial report for the annual final accounts.
    2. The profit before tax for the most recent two fiscal years represents on average 6 percent or greater of the amount of paid-in capital in its final accounts and the profitability for the most recent fiscal year is greater than that for the immediately preceding fiscal year; or
    3. The profit before tax for the most recent five years represents 3 percent or greater of the share capital stated on the financial report for the annual final accounts.
  4. Dispersion of share ownership: The number of registered shareholders is 1,000 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, the number of registered shareholders is at least 500, and the total number of shares they hold is 20 percent or greater of the total issued shares, or at least 10 million.
  5. An issuer listed in the food industry or whose income from catering business occupies at least 50 percent of its total operating revenue in the last fiscal year shall comply with the following:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection, etc.
    Where an issuing company applying for the listing of its stock has a market value of NT$5 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The company meets the conditions set forth in subparagraphs 1, 2, 4 and 5 of the preceding paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$5 billion and is better than the previous fiscal year.
  3. Its cash flow from operating activities in the most recent fiscal year is positive.
  4. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the capital stock identified in the financial report.
    Where an issuing company applying for the listing of its stock has a market value of NT$6 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The company meets the conditions set forth in subparagraphs 1, 2, 4 and 5 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$3 billion and is better than the previous fiscal year.
  3. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the capital stock identified in the financial report.
    The TWSE will agree to list the stock of an issuing company applying for the listing of its stock in accordance with the second paragraph or the preceding paragraph only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application, provided where its stock is already listed and traded on the Taipei Exchange in accordance with Article 3 of the Rules Governing the Review of Securities for Trading on the TPEx or listed and traded on the Taiwan Innovation Board, the number of listed shares multiplied by the closing price of the last day of trading before the termination of trading on the TPEx or change to listing applies to the calculation; the price is determined in accordance with the principles set out in Article 58-3, paragraph 4, subparagraph 2 of the Operating Rules of the TWSE if there is no closing price on the last day of trading.
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6     Where the issuing company applying for the listing of its stock is an important enterprise involved in national economic reconstruction projects which has been recognized and certified in writing by the authority in charge of the enterprise concerned and meets the following requirements, the TWSE will agree to list its stock:
  1. It is incorporated under the encouragement of the government, and 50 percent or greater of the total number of its issued shares as of the date of its application is held jointly by the Central Government or by the local autonomy organization(s) at the level of province (or municipality under direct jurisdiction of Executive Yuan) designated by the Central Government and the juristic person(s) with 50 percent or greater of its capital fund is contributed by the Central Government or the local autonomy organization(s) designated by the Central Government.
  2. Its paid-in capital is NT$1 billion or more at the time when it applies for listing.
  3. The dispersion of share ownership meets the criteria set forth in Article 4, paragraph 1, subparagraph 4 of these Rules.
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6-1     Where the issuing company applying for the listing of its stock is a private enterprise participating in major national public construction projects under encouragement of the government, where it has acquired the concession agreement for investment, construction, and operation approved by the Central Government, municipality under direct jurisdiction of the Executive Yuan, and the local autonomy organization(s) or the juristic person(s) with 50 percent or greater of its capital fund contributed by the Central Government, municipality under direct jurisdiction of Executive Yuan, or the local autonomy organization(s) and the certification issued by the said agency(ies), and where it meets the following requirements, the TWSE will agree to list its stock:
  1. The company is newly established for procurement of the concession agreement and its business items have been approved by the central authority in charge of the enterprise concerned.
  2. Its paid in capital is NT$5 billion or more at the time when it applies for listing.
  3. The total cost expected to be injected in the construction project at the time when the concession agreement is procured is NT$20 billion or more.
  4. The remaining term of the concession agreement is 20 years or more at the time when it applies for listing.
  5. Its directors, shareholders holding 5 percent or more of its total issued shares, or its shareholders or operators who make equity investment in the form of technical know-how and hold 0.5 percent or more of its total issued shares or 100,000 shares or more shall have the technical capability, financial means, and other necessary abilities as required for the completion of the concession agreement, and a certification issued by the agency approving the concession agreement has been obtained.
  6. The dispersion of share ownership meets the criteria set forth in Article 4, paragraph 1, subparagraph 4 of these Rules.
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9     Notwithstanding the fact that an issuing company applying for the listing of its stock meets the listing criteria set forth in these Rules, the TWSE may disagree to its listing if the issuing company has any of the events listed below, except for any of those in subparagraphs 8, 9, or 10 under which the TWSE shall disagree to its listing, and is deemed by the TWSE to be inappropriate for listing:
  1. It has any of the events set forth in Article 156, paragraph 1, subparagraphs 1 and 2 of the Securities and Exchange Act, or has made misrepresentation or false statement or conducted unlawful activities that may affect the price of its securities after listing thereof, and will cause fear that the market order may be affected or the public interests may be harmed.
  2. Its financial or business affairs are not independent from other person(s).
  3. It has had any material labor dispute or environmental pollution sufficient to affect its normal financial and business operations, and has not made improvement.
  4. It has been discovered any material non-arms-length transaction and has not made improvement.
  5. After the capital increase through a new share issue which has been effected or is being effected in the year in which it applies for listing is included in the share capital listed in the finanncial reports for the respective year, its profitability does not meet the listing criteria. Where the shares have no par value or a par value other than NT$10, the capital stock listed in the financial reports as mentioned above is replaced by net worth.
  6. It has failed to effectively implement its written accounting system, internal control system, or internal audit system, or has failed to prepare financial reports in accordance with relevant laws and regulations and generally accepted accounting principles, and the event of this failure is considered as material.
  7. There has been serious deterioration in its business operation.
  8. Where the applicant company or its incumbent directors, general manager or de facto responsible person violated the principle of good faith in the most recent three years.
  9. If an applicant company has less than five directors or same-sex directors on its board of directors, or its independent directors number less than three persons or less than one-third of the number of directors; or if any of its board of directors are unable to independently exercise their functions; or if it has not appointed the remuneration committee pursuant to Article 14-6 of the Securities and Exchange Act and related provisions. Additionally, among the elected independent directors, at least one of them must be a professional in accounting or finance.
  10. Where the applicant company has been registered for trading as an emerging stock on the TPEx in the fiscal year of the listing application and the most recent fiscal year thereto, and there has been, from the TPEx registration date onward, any trading of stock issued by the applicant company by any incumbent director, or shareholder holding 10 percent or greater of its total issued shares other than on the emerging stock market; provided, this restriction shall not apply where such trading is for purposes of underwriting under Article 11 of these Rules or for other legitimate reason.
  11. Where the shares of the applicant company are held by a TWSE (or TPEx) listed company and TPExmeet any of the following conditions, and any equity transfer conducted by the TWSE (or TPEx) listed company during the most recent three years for purposes of reducing its shareholding ratio in the applicant company. has not been conducted in a manner giving pre-emptive subscription rights to the existing shareholders, or in other manner not detrimental to the rights and interests of the shareholders, of the TWSE (or TPEx) listed company:
    1. The applicant company is the existing or newly established company being transferred business or assets due to a demerger of the TWSE (or TPEx) listed company.
    2. The applicant company is a subsidiary of the TWSE (or TPEx) listed company, and during the three-year period before the application for TWSE listing, the TWSE (or TPEx) listed company has cumulatively reduced its direct and indirect shareholding in the applicant company by 20 percent or more.
  12. Where the listing is considered by the TWSE as inappropriate due to its scope of business, nature or special circumstances.
    Subparagraph 2 of the immediately preceding paragraph shall not apply to companies applying for listing which are government-owned enterprises.
    The ending date of the applicable periods referred to in various subparagraphs of paragraph 1 of this Article shall be the day immediately before the date on which the Agreement for Listing takes effect.
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12-1     An issuing company that privately places securities may not apply for initial listing of such privately placed securities during the period of restriction of transfer as set forth in Article 43-8 of the Securities and Exchange Act. If, once the period of restriction of transfer has elapsed, the company intends to apply for listed trading of the securities, it may file such application only after first completing public issuance examination and approval procedures with the Competent Authority.
    Securities that are privately placed by a listed company and securities subsequently distributed, converted, or subscribed may not be listed during the period of restriction of transfer as set forth in Article 43-8 of the Securities and Exchange Act. Once the period of restriction of transfer has elapsed, the company may file a listing application only after first applying to the TWSE for a letter of approval and, on the basis of that letter, completing issuance examination and approval procedures with the Competent Authority. However, it may be exempted from the requirement of carrying out public offering prior to listing under Article 11.
    When applying to the TWSE for a letter of approval under the preceding paragraph, a listed company shall meet the standards in each of the following subparagraphs:
  1. The financial reports for the most recent period and the most recent fiscal year show an absence of accumulated deficit.
  2. The profit before tax in the financial reports meets one of the following standards:
    1. The profit before tax for each of the most recent two fiscal years represents 4 percent or greater of the share capital stated on the financial report for the annual final accounts.
    2. The average profit before tax for the most recent two fiscal years represents 4 percent or greater of the share capital stated on the financial report for the annual final accounts, and the profitability for the most recent fiscal year is greater than that for the immediately preceding fiscal year.
  3. A CPA has audited the financial reports for the most recent two fiscal years and has signed and issued an audit report containing an unqualified opinion. If an audit report containing other than an unqualified opinion is issued, it does not affect the fairness of presentation of the financial reports.
  4. None of the events set out in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, or 12 is present.
  5. The total amount of registered shares held by the directors as a whole is higher than the share ownership ratio prescribed by the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.
  6. The fund utilization plan has been completely executed for the funds obtained from the private placement of securities, and has yielded reasonable benefits; provided, this restriction shall not apply if there is legitimate reason.
  7. For an applicant company that had profit after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to the share capital stated on the financial report for the annual final accounts for the most recent fiscal year shall be better than that for the fiscal year before the shareholders meeting resolved on the private placement of securities, provided such restriction on profitability does not apply where the average of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, better than that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4 percent or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, the privately placed shares have not been transferred, or have been transferred to the holding of any non-insider(s) or non related party(ies) of the applicant company.
    2. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, the securities have not been transferred, or have been transferred to the holding of any non-insider(s) or non related party(ies) of the applicant company.
  8. For an applicant company that had profit after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to the share capital stated on the financial report for the annual final accounts for the most recent fiscal year may not be lower than 200 percent of that for the fiscal year before the shareholders meeting resolved on private placement of securities, provided such restriction on profitability does not apply where the average of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, not lower than 200 percent of that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4 percent or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, part or all of the privately placed shares have been transferred to the holding of any insider(s) or related party(ies) of the applicant company.
    2. The private placement did not introduce strategic investors.
    3. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, part or all of the securities have been transferred to the holding of any insider(s) or related party(ies) of the applicant company.
    4. The conducting of the private placement of securities was not done in accordance with the Directions for Public Companies Conducting Private Placements of Securities ("the Directions for Private Placements"), where the circumstances were serious.
  9. For an applicant company that had net loss after tax or accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to the share capital stated on the financial report for the annual final accounts for the most recent fiscal year shall be 6 percent or higher:
    1. Any insider or related party of the company participates in the private placement, and the subscription price does not comply with the percentage requirements set out by the Competent Authority.
    2. The private placement of securities is not carried out in accordance with the Directions for Private Placements, and the circumstances are serious.
  10. Others consistent with the provisions of the Competent Authority.
    A company applying for listing in accordance with Article 4, paragraph 2 or 3, and Article 5, Article 6, or Article 6-1 may waive the application of subparagraph 2 of the preceding paragraph if the company, which has never obtained a letter of approval from the TWSE in accordance with the preceding paragraph, applies for said letter in accordance with paragraph 2 upon the adoption of a special resolution in a shareholders’ meeting on the registration of the retroactive handling of public issuance procedures of privately placed securities, subject to compliance with the following subparagraphs:
  1. No assignment is conducted within six years from the date of delivery of the privately placed securities, except transfers taking effect in accordance with the law.
  2. The price of the privately placed securities is not lower than 80 percent of the reference price or theoretical price.
  3. No placee of the privately placed securities is an insider or related party of the company.
  4. In the last three years, the sum of the number of privately placed securities in respect of which an application for a letter of approval is made in accordance with this paragraph and the number of securities with equity characteristics that may exercise or be converted into common shares has not exceeded 20 percent of the total number of listed shares at the time of the application, except where, in the event of excess shares, the holder has undertaken through coordination that such shares would all be placed in central custody before listing. The withdrawal period and withdrawn number of shares placed in central custody are governed by the proviso in paragraph 4 of Article 10 mutatis mutandis.
  5. No material change in the scope of business as in Article 50, paragraph 1, subparagraph 14 of the Operating Rules of the TWSE has occurred since the listing date, except as caused by the special characteristics of the industry or other reasonable causes.
    Prior to the listing, all privately placed shares held by non-strategic investors, insiders, and related parties as referred to in paragraph 3, subparagraph 8 or 9 shall be placed in central custody with a central securities depository enterprise incorporated with the approval of the Competent Authority. One half of the shares placed in central custody may be withdrawn only after the end of a 6-month period starting from the date of commencement of listed trading; the remaining shares may be withdrawn in full only after the end of a 1-year period starting from the date of commencement of listed trading. The custodial agreement may not be rescinded during the custody period, and the shares in central custody may 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.
    Where the Competent Authority has restricted the listed trading of securities issued by a listed company, privately placed securities of the company may not be listed until such restriction has been lifted, even if the period of restriction of transfer of the privately placed shares has elapsed.
    Where the shares of the company have no par value or a par value other than NT$10, the ratio of the net profit before tax to the capital stock in the annaul final accounts as specified in paragraph 3, subparagraph 2 and subparagraphs 7 to 9 shall be calculated using the company's net worth in the annual final accounts in place of the capital stock stated in the financial reports, and must reach at least half of the prescribed ratio in each of the subparagraphs.
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28-1     The TWSE may issue documentation evidencing listing approval of the application by a foreign issuer for a TWSE primary listing if that issuer meets all of the requirements listed below:
  1. It complies with regulations in connection with the Act Governing Relations Between Peoples of the Taiwan Area and the Mainland Area. However, if individuals, juristic persons, groups, or other institutions from the Mainland Area have direct or indirect shareholding or capital contribution exceeding 30 percent in, or effective control over, the foreign issuer, special-case permission shall be obtained from the competent authority.
  2. At the time it applies for listing, the applicant company or any of its controlled companies shall have an operational track record of three years or longer.
  3. The company scale meets one of the following criteria:
    1. At the time of application for listing, paid-in capital or net worth is NT$600 million or higher.
    2. At the time of listing, market capitalization is NT$1.6 billion or higher.
  4. Its cumulative profit before tax for the most recent three fiscal years is NT$250 million or higher, and its profit before tax for the most recent fiscal year is NT$120 million or higher, and it does not have any accumulated deficit.
  5. Its number of shareholders of record is 1,000 or more, and the number of shareholders other than insiders of the foreign issuer and juristic persons of which such insiders own over 50 percent of the shareholding is no less than 500 and their total shareholdings constitute 20 percent or more of the total issued shares or not less than 10 million shares.
  6. An issuer listed in the food industry or whose income from catering business occupies at least 50 percent of its total operating revenue in the last fiscal year shall comply with the following:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection, etc.
  7. The number of shares planned to be listed and traded shall exceed 50 percent of the total number of its issued shares.
  8. It is recommended, in writing, by two or more securities underwriters.
    Where a foreign issuer applies for a TWSE primary listing of stock, if, for the foreign issuer or a company controlled by it contributing 50 percent of its overall operating revenue, there has been issued an unequivocal opinion by an R.O.C. competent authority of a target business in accordance with the business attributes of foreign issuer, or a TWSE-designated professional institution, indicating that the company is a technology enterprise or a cultural and creative enterprise with market potential, if the foreign issuer meets the requirements of the following subparagraphs, the TWSE may issue evidentiary documentation indicating its approval of the listing:
  1. It complies with the relevant provisions of the Act Governing Relations Between Peoples of the Taiwan Area and the Mainland Area. However, if individuals, juristic persons, groups, or other institutions from the Mainland Area have direct or indirect shareholding or capital contribution exceeding 30 percent in, or effective control over, the foreign issuer, special-case permission shall be obtained from the competent authority.
  2. At the time of the listing application, the applying company or the controlled company that is a technology enterprise shall have a business record of one full fiscal year or more.
  3. At the time of the listing application, the paid-in capital or net worth reaches NT$300 million or more, or the market capitalization reaches NT$800 million or more.
  4. At the time of the listing application, the net worth on the most current financial report audited and attested by a CPA is not lower than two-thirds of the capital stock, with proof that the company has operating capital sufficient for 12 months of operation following the listing.
  5. Its number of shareholders of record is 500 or more, and the total shareholdings of the shareholders of record other than insiders of the foreign issuer and juristic persons of which such insiders own over 50 percent of the shareholding constitute 20 percent or more of the total issued shares or not less than five million shares.
  6. The number of shares planned to be listed and traded shall exceed 50 percent of the total number of its issued shares.
  7. It is recommended by two or more securities underwriters.
    When a foreign issuer applies for a TWSE primary listing of stock, if its operating revenue derived from construction business as stated in the financial reports represents 20 percent or greater of its total operating revenue, or its gross profit from operations derived from construction business represents 20 percent or greater of its total gross profit, or its operating revenue or gross profit derived from construction business is more than that derived from other business items, during the most recent two fiscal years, it shall meet all of the requirements provided in Articles 16 and 17 herein, in which case, the TWSE may issue evidentiary documentation indicating its approval of the listing thereof; in the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the requirement of Article 16, paragraph 1, subparagraph 2 shall be calculated on the basis of the net worth reaching NT$600 million or more.
    "Controlled company" in paragraphs 1 and 2 means any of the following circumstances:
  1. Any controlled company in which the foreign issuer directly holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
  2. Any controlled company in which the foreign issuer, indirectly through a subsidiary company, holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
  3. Any controlled company in which the foreign issuer directly, or indirectly through a subsidiary, holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
  4. A company of which a foreign issuer directly or indirectly elects or appoints more than half of the directors for the board of directors.
    Where a foreign issuer applying for the primary listing of its stock has a market value of NT$5 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The issuer meets the conditions set forth in subparagraphs 1 and 2, item 1 of subparagraph 3 and subparagraphs 5 to 8 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$5 billion and is better than the previous fiscal year.
  3. Its cash flow from operating activities in the most recent fiscal year is positive.
  4. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the share capital identified in the financial report.
    Where a foreign issuer applying for the primary listing of its stock has a market value of NT$6 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The issuer meets the conditions set forth in subparagraphs 1 and 2, item 1 of subparagraph 3 and subparagraphs 5 to 8 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$3 billion and is better than the previous fiscal year.
  3. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the share capital identified in the financial report.
    The TWSE will agree to list the stock of a foreign issuer applying for the primary listing of its stock who shall meet the conditions in paragraph 1, subparagraph 3, item 2, or whose application is filed in accordance with the fifth paragraph or the preceding paragraph only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application, provided where its stock is already primary listed and traded on the TPEx in accordance with Article 4 of the TPEx Rules Governing the Review of Foreign Securities for Trading on the TPEx or primary listed and traded on the Taiwan Innovation Board, the number of shares in the listing application multiplied by the closing price of the last day of trading before the termination of primary TPEx trading or change to primary listing applies to the calculation; the price is determined in accordance with the principles set out in Article 58-3, paragraph 4, subparagraph 2 of the Operating Rules of the TWSE if there is no closing price on the last day of trading.
    If a foreign issuer is a professional investor and its purpose is to directly, or indirectly through a subsidiary company, control the operations of a held company or companies, 70 percent or more of that foreign issuer's net operating income in its consolidated financial statement shall be derived from a controlled company or companies.
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28-13     A foreign issuer that privately places securities may not apply for initial listing of such privately placed securities during the period of restriction of transfer as set forth in Article 43-8, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act. If, once the period of restriction of transfer has elapsed, the issuer intends to apply for listed trading of the securities, it may file such application only after first supplementarily completing public issuance examination and approval procedures with the Competent Authority.
    Securities that are privately placed by a primary listed company and securities subsequently distributed, converted, or subscribed may not be listed during the period of restriction of transfer as set forth in Article 43-8, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act. Once the period of restriction of transfer has elapsed, the company may file a listing application only after first applying to the TWSE for a letter of approval and, on the basis of that letter, supplementarily completing issuance examination and approval procedures with the Competent Authority. However, the company may be exempted from the requirement of carrying out public sale prior to listing under Article 28-10.
    When applying to the TWSE for a letter of approval under the preceding paragraph, a primary listed company shall meet the standards in each of the following subparagraphs:
  1. The financial reports for the most recent period and the most recent fiscal year show an absence of accumulated deficit.
  2. Its cumulative profit before tax for the most recent three fiscal years is NT$160 million or higher, and its profit before tax for the most recent fiscal year is NT$80 million or higher.
  3. A CPA has audited the consolidated financial reports for the most recent two fiscal years and has signed and issued an audit report containing an unqualified opinion. If an audit report containing other than an unqualified opinion is issued, it does not affect the fairness of presentation of the financial reports.
  4. None of the events set out in Article 28-8, subparagraphs 1, 3, 4, or 8 is present.
  5. The fund utilization plan has been completely executed for the funds obtained from the private placement of securities, and has yielded reasonable benefits; provided, this restriction shall not apply if there is legitimate reason.
  6. For an applicant company that had net income after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to year-end share capital for the most recent fiscal year shall be better than that for the fiscal year before the shareholders meeting resolved on the private placement of securities, provided such restriction on profitability does not apply where the average of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, better than that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4 percent or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, the privately placed shares have not been transferred, or have been transferred to the holding of non-insider(s) or non related party(ies) of the applicant company.
    2. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, the securities have not been transferred, or have been transferred to the holding of non-insider(s) or non related party(ies) of the applicant company.
  7. For an applicant company that had net income after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to year-end share capital for the most recent fiscal year may not be lower than 200 percent of that for the fiscal year before the shareholders meeting resolved on private placement of securities, provided such restriction on profitability does not apply where the average of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, not lower than 200 percent of that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4 percent or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, part or all of the privately placed shares have been transferred to the holding of insider(s) or related party(ies) of the applicant company.
    2. The private placement did not introduce strategic investors.
    3. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, part or all of the securities have been transferred to the holding of insider(s) or related party(ies) of the applicant company.
    4. The conducting of the private placement of securities was not done in accordance with the Directions for Private Placements, where the circumstances were serious.
  8. For an applicant company that had net loss or accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the profit before tax for the most recent fiscal year shall be NT$120 million or higher:
    1. Any insider or related party of the company participates in the private placement, and the subscription price does not comply with the percentage requirements set out by the Competent Authority.
    2. The private placement of securities is not carried out in accordance with the Directions for Private Placements, and the circumstances are serious.
  9. Others consistent with the provisions of the Competent Authority.
    10.     A company applying for primary listing in accordance with Article 28-1, paragraph 2, 5 or 6 may waive the application of subparagraph 2 of the preceding paragraph if the company, which has never obtained a letter of approval from the TWSE in accordance with the preceding paragraph, applies for said letter in accordance with paragraph 2 upon the adoption of a special resolution in a shareholders’ meeting on the registration of the retroactive handling of public issuance procedures of privately placed securities, subject to compliance with the following subparagraphs:
    1. No assignment is conducted within six years from the date of delivery of the privately placed securities, except transfers taking effect in accordance with the law.
    2. The price of the privately placed securities is not lower than 80 percent of the reference price or theoretical price.
    3. No placee of the privately placed securities is an insider or related party of the company.
    4. In the last three years, the sum of the number of privately placed securities in respect of which an application for a letter of approval is made in accordance with this paragraph and the number of securities with equity characteristics that may exercise or be converted into common shares has not exceeded 20 percent of the total number of listed shares at the time of the application, except where, in the event of excess shares, the holder has undertaken through coordination that such shares would all be placed in central custody before listing. The withdrawal period and withdrawn number of shares placed in central custody are governed by the proviso in paragraph 4 of Article 10 mutatis mutandis.
    5. No material change in the scope of business as in Article 50-3, paragraph 1, subparagraph 11 of the Operating Rules of the TWSE has occurred since the listing date, except as caused by the special characteristics of the industry or other reasonable causes.
        Where the shares of a primary listed company has no par value or a par value other than NT$10, the ratio of the net profit before tax to the capital stock in the annual final accounts as specified in paragraph 3, subparagraphs 6 and 7 shall be calculated using the company's net worth in the annual final accounts in place of the capital stock stated in the financial reports, and must reach at least half of the prescribed ratio in each of the subparagraphs.
        Prior to the listing, all privately placed shares held by non-strategic investors, insiders, and related parties as referred to in paragraph 3, subparagraph 7 or 8, shall be placed in central custody with a central securities depository enterprise incorporated with the approval of the Competent Authority. One half of the shares placed in central custody may be withdrawn only after the end of a 6-month period starting from the date of commencement of listed trading; the remaining shares may be withdrawn in full only after the end of a 1-year period starting from the date of commencement of listed trading. The custodial agreement may not be rescinded during the custody period, and the shares in central custody may 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.
        Where the Competent Authority has restricted the listed trading of securities issued by a primary listed company, privately placed securities of the company may not be listed until such restriction has been lifted, even if the period of restriction of transfer of the privately placed shares has elapsed.
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29     A domestic issuer that applies for the listing of stocks at the TIB must comply with the government’s industrial development strategies, have key core technologies and the ability to innovate or have an innovative operational model, and should meet the following qualifications:
  1. Years of establishment: Has been around for at least two years since its incorporation under the Company Act at the time of application for listing.
  2. Has issued 10 million or more shares at the time of application for listing.
  3. Market value and financial standards: Must meet one the following standards at the time of application for listing:
    1. Market value is NT$1 billion or more, total operating revenue as stated in the financial reports for the most recent four quarters is not less than NT$100 million and the applicant must prove it has the working capital sufficient for 12 months after listing in the market.
    2. For an applicant doing business in the biotechnology and pharmaceutical industry, its market value is NT$2 billion or more, and it must prove it has not less than 125 percent of the working capital required for 12 months after listing in the market. If an applicant is developing new medicine, its core products must have passed stage 1 of a clinical trial.
    3. Market value is NT$4 billion or more, and the applicant must prove it has not less than 125 percent of the working capital required for 12 months after listing in the market.
  4. Dispersion of share ownership: The number of registered shareholders is 50 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, registered shareholders hold 5 percent or more of the total issued shares, or at least 5 million shares.
  5. An applicant listed in the food industry or with income from dining and beverage services exceeding 50 percent of its total operating revenues in the most recent fiscal year must meet the requirements in the following items:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection, etc.
  6. Recommended by 2 or more securities underwriters.
    A foreign issuer that applies for the listing of stocks at the TIB must meet, in addition to the requirements in the text and subparagraphs 2 to 6 of the preceding paragraph, the following qualifications:
  1. Meet the application regulations under the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, provided that if the people, juristic persons, group or other institutions directly or indirectly own shares or invest in the issuer for more than 30 percent of its value, or have control over the issuer, it must obtain an approval from the competent authority on a case-by-case basis.
  2. Years of establishment: The applicant or any of its subordinate companies must have 2 or more years of business records.
  3. The inspection institution under item B of subparagraph 5 of the preceding paragraph may be replaced by a laboratory or inspection institution certified by the local competent authority, international certification institution or an institution appointed by its competent authority.
    The TWSE will agree to list its stock of a domestic issuer or a foreign issuer applying for the listing of its stock at the TIB in the preceding two paragraphs only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application.
    A recommending securities underwriter should issue an evaluation opinion on the requirements on application for listing, i.e. compliance with the government’s industrial development strategies, key core technologies and the ability to innovate or an innovative operational model, in the first paragraph.
    The core products in item B of subparagraph 3 of paragraph 1 means the biotechnological and pharmaceutical products that are the focus of a domestic issuer or foreign issuer in its engagement in development, application and commercialization of new drugs at the time of application for listing.
    Article 28-2, paragraph 1 applies mutatis mutandis to the definition of securities underwriter in subparagraph 6 of paragraph 1.
    Financial reports as referred to in this chapter shall be governed mutatis mutandis by Article 7, paragraphs 1 and 2 in the case of a domestic issuer, or by Article 28-3, paragraphs 3 and 4 in the case of a foreign issuer.
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39     A domestic issuer or foreign issuer engaging in private placement of securities shall not apply for initial listing of privately placed securities at the TIB during the period when transfers of these securities are restricted under Article 43-8 of the Securities and Exchange Act. At the end of the period of restrictions, if the issuer wishes to apply for listing and trading at the TIB, it may complete the issue review procedure retrospectively with the competent authority before making the application.
    No privately placed securities of a TIB listed company or a TIB primary listed company, as well as securities allotted, converted or subscribed thereafter, shall be listed during the period when transfers of these securities are restricted under Article 43-8 of the Securities and Exchange Act. At the end of the period of restrictions, if the company wishes to apply for listing, it shall obtain an approval letter from the TWSE and then use the letter to complete the issue review procedure retrospectively with the competent authority before making the application, in which case the prelisting public sale required under Article 36 may be waived.
    A TIB listed or a TIB primary listed company must meet the following criteria when requesting an approval letter from the TWSE in accordance with the preceding paragraph:
  1. No accumulated losses are indicated in the financial reports for the most recent quarter and the most recent fiscal year.
  2. Profits before tax in the financial report meet one of the following standards:
    1. Ratio of profits before tax to share capital listed in the financial report for annual account has been above 4 percent in the most recent two fiscal years.
    2. Average ratio of profits before tax to share capital listed in the financial report for annual account in the most recent two fiscal years is above 4 percent, and profitability in the most recent fiscal year is better than the previous fiscal year.
  3. The financial reports for the most recent two fiscal years have been audited by CPA who has issued an audit report with unqualified opinion. If an audit report other than one with unqualified opinion is issued, there is no circumstance that would prevent financial report from presenting fairly.
  4. There are no circumstances under Article 31, paragraph 1, subparagraphs 1, 3, 4, 5, 7 or 11.
  5. Total number of registered shares held by all the directors is higher than the shareholding set forth under the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.
  6. Funds from private placement of securities have been fully utilized in accordance with the fund implementation plan and reasonable effects have been created, except when there is a legitimate reason.
  7. Where there are profits after tax and there are no accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year is better than the fiscal year before the resolution of the shareholders’ meeting for private placement of securities, provided that due to changes in conditions of the relevant industry, the above profitability requirement does not apply if the average ratio for the three fiscal years prior to the application is better than the ratio for the fiscal year or the average ratio for the three fiscal years before the resolution of the shareholders’ meeting for private placement of securities, and the average is above 4 percent:
    1. The sole purpose of the private placement is to introduce strategic investors, and when an approval letter is requested, privately placed shares have not been transferred, or have been transferred to parties other than insiders or related parties for holding.
    2. When the circumstances under Articles 7 and 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers are likely to happen, public offering is not possible because no reasonable improvement can be made for a legitimate cause, funds are desperately needed, private placement is to take place upon the approval of the TWSE, and when an approval letter is requested, privately placed shares have not been transferred, or have been transferred to parties other than insiders or related parties for holding.
  8. Where there are profits after tax and there are no accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year should not be lower than 200 percent of the ratio the fiscal year before the resolution of the shareholders’ meeting for private placement of securities, provided that due to changes in conditions of the relevant industry, the above profitability requirement does not apply if the average ratio for the three fiscal years prior to the application is not lower than 200 percent of ratio of the fiscal year or the average ratio for the three fiscal years before the resolution of the shareholders’ meeting for private placement of securities, and the average is above 4 percent:
    1. The sole purpose of the private placement is to introduce strategic investors, and when an approval letter is requested, part or all privately placed shares have been transferred to insiders or related parties for holding.
    2. The purpose of the private placement is not to introduce strategic investors.
    3. When the circumstances under Articles 7 and 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers are likely to happen, public offering is not possible because no reasonable improvement can be made for a legitimate cause, funds are desperately needed, private placement is to take place upon the approval of the TWSE, and when an approval letter is requested, part or all privately placed shares have been transferred to insiders or related parties for holding.
    4. Private placement of securities is not compliant with the requirements under the directions for private placement and it is a material violation.
  9. Where there are losses after tax or accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year should be over 6 percent:
    1. Insiders or related parties participate in the private placement and the subscription price fails to meet the percentage requirement set forth by the competent authority.
    2. Private placement of securities is not compliant with the requirements under the directions for private placement and it is a material violation.
  10. It has otherwise satisfied the requirements of the competent authority.
    Where a TIB listed company or a TIB primary listed company has never obtained the approval letter from the TWSE in accordance with the preceding paragraph and the a special resolution for filing the retrospective public issuance with respect to a private placement of securities has been approved at the shareholders’ meeting, when the company requests an approval in accordance with paragraph 2, it may not be subject to the circumstances under subparagraph 2 of the preceding paragraph and Article 12-1, paragraph 4 or Article 28-13, paragraph 4 may respectively apply mutatis mutandis.
    Parties other than strategic investors, insiders and related parties under paragraph 3, subparagraphs 8 and 9 shall deposit the privately placed securities they hold under centralized custody at the centralized securities depository enterprise established upon approval of the competent authority before the listing of these securities. One half of these securities may be withdrawn only after full six months from the first day of listing and trading. The remaining securities may be withdrawn only after a full year from the first day of listing and trading. No rescission of contract prior to expiry of the term of custody is allowed. No shares or certificates under custody may be transferred or mortgaged. Change of status of a holder will not affect the validity of the custody.
    Where the competent authority restricts the listing and trading of the securities issued by a listed company, the privately placed securities shall not be listed before these restrictions have been removed despite that the period when transfers of these privately placed securities are restricted has expired.
    Where the shares of a TIB listed company or a TIB primary listed company have no par value or a par value other than NT$10, the ratio of the net profit before tax to the capital stock in the annual final accounts as specified in paragraph 3, subparagraph 2 and subparagraphs 7 to 9 shall be calculated using the company's net worth in the annual final accounts in place of the capital stock stated in the financial reports, and must reach at least half of the prescribed ratio in each of the subparagraphs.
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