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Amended Article

Title：

Taiwan Stock Exchange Corporation Procedures for Review of Securities Listings  CH

Amended Date： 2025.03.10 (Articles 7 amended,English version coming soon)
Current English version amended on 2024.12.16 
Categories： Primary Market > Review
Article Content Chapter Content Search Article No. Search Legal Basis Subordinate Legislation Amended Article Legislative History Chinese
Article 4     For initial stock listing applications, after receiving the application and supporting documents, the administering department shall form a task force consisting of two or more persons (depending on the overall current status of the human resources of the department) to assess each application. For applications by already-listed companies for issuance of new shares for capital increase, or for corporate bonds or other securities listings, the administering department shall designate a person to handle such applications. In addition to keeping the application and supporting documents in safe custody, for initial stock listing applications, the designated person shall also submit one copy each of the prospectus and the draft underwriter assessment report for public display.
    After accepting the application for processing, the administering department shall retain an outside reviewer with field-specific expertise to give a consulting opinion on the matters provided in the Table of Consultation Matters. If questions arise relating to financial, accounting, or legal matters, the case-handling unit may also retain outside financial, accounting, and/or legal professionals to give a written opinion. Solicitation of written opinions shall be handled in accordance with the TWSE "Rules for Solicitation of Opinions in Reviews of Initial Applications for TWSE Listing by Public Companies." The aforesaid rules will be separately adopted. The above regulations in regard to outside reviewers shall not apply to cases that, pursuant to Article 7-1, are exempt from review by the Review Committee. A company referred to in Articles 53-8, 53-18, 53-21 and 53-24 of the TWSE Operating Rules, when applying to the TWSE for stock listing, or a company referred to in Article 7-1, paragraph 1, subparagraph 3, when applying for relisting on the stock exchange of stocks being traded on the Taiwan Innovation Board, may be exempt from the above provisions regarding solicitation of opinions.
    The consulting opinions of the outside reviewers referred to in the preceding paragraph shall be delivered to the TWSE 15 days before the Review Committee meets.
    After accepting an application for listing on the Taiwan Innovation Board made in accordance with Article 29 of the Rules Governing Review of Securities Listings, the administering department shall retain innovativeness review experts to give an opinion before acting in accordance with paragraph 2. Where the applicant may apply to the TWSE for review of innovativeness and obtains a letter of consent before applying for listing its stock on the Taiwan Innovation Board, the applicant shall apply for listing on the Taiwan Innovation Board within six months of the date of the TWSE letter, or the letter of consent will cease to be effective. Where no letter of consent is obtained, an application for review of innovativeness may be filed again six month after the date of the letter.
    The operating procedures of the review of innovativeness will be prescribed by the TWSE.
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Article 7     Review Process:
  1. After they have been delegated a securities listing case, the case handlers shall complete the following review procedures:
    1. Application Documents: Check all application documents received and complete a "Stock Listing Application Receipt Record." (Attachment 1).
    2. Prospectus: Examine each item detailed in the content of the prospectus according to the TWSE Regulations Governing the Particulars to be Recorded in Prospectuses for Initial Listing of Securities and other relevant regulations, and re-examine a Checklist of Legal Issues to be Examined upon Application by Issuers for Exchange Listings of Stock (Attachment 2) provided by a lawyer to ascertain whether such checklist adequately supports the conclusions of the legal opinion contained in the prospectus.
    3. Underwriter's Assessment Report:
      4. Review the underwriter's assessment report and check whether each item is assessed in accordance with the rules and regulations of the TWSE and whether it draws clear and definitive conclusions. Any matters relating to the provisions of the TWSE Regulations for Handling Deficiencies in Evaluation Reports or Other Related Information Submitted by a Securities Underwriter shall be handled, after obtaining signed approval by the TWSE's president, pursuant to Article 9 of the same Regulations. The above-mentioned Regulations for Handling Deficiencies in Evaluation Reports or Other Related Information Submitted by a Securities Underwriter shall be separately prescribed by the TWSE.
    4. Internal Control Systems
      1. Gain an understanding of the results and attached assessment opinion from the CPAs' internal control system investigation, and of the CPAs' recommendations regarding internal control systems as stated in the recommendation report, in compiling the Record of the Internal Control System Documentary Review (Attachment 3).
      2. Carry out the review in accordance with the TWSE Procedures for Reviewing Internal Control System Audit Reports Issued by Certified Public Accountants, and complete Attachment 2 of said Procedures, the Opinion Form for Review of the Internal Control System Audit Reports Issued by Certified Public Accountants.
    5. Comprehensive Analysis of Financial Information:
      6. Review the annexed survey report for related industries, explanations of major changes in accounting items published in the prospectus, analytical data from the CPAs' permanent records, and the underwriter's assessment report to ascertain and assess the financial condition and trends of the applicant company and excerpt important items or irregularities to compile the Comprehensive Analysis of Financial Data (Attachment 4).
    6. CPA auditing procedures and financial report: Review the CPAs' permanent files, the working papers for the internal accounting control system for the most recent fiscal year and the audit working papers for the most recent 3 years preceding the date of application and re-examine the Certified Public Accountant Auditing Procedure Checklist (Attachment 5) completed by the CPAs to ensure compliance with Standards on Auditing No. 230 ("Audit Documentation "), Standards on Auditing No. 315 ("Identifying and Assessing the Risks of Material Misstatement"), the Regulations Governing Audit and Attestation Engagements of Certified Public Accountants, and all other applicable regulations. Include excerpts or photocopies of important or irregular items in the report. Examine the CPA audit reports for the most recent 3 fiscal years and the notes and statements of major accounting items therein to ensure that the applicant company's financial reports is prepared in compliance with the regulations prescribed by the competent authority governing the preparation of financial reports by each enterprise. [After completion of the above] the case handlers shall note their opinion in the opinion column of the Certified Public Accountant Auditing Procedure Checklist. If the applicant company is found in violation of any of the requirements of the TWSE Regulations Governing the Handling of Errors by Certified Public Accountants in Auditing of Initial Applications for Market Listing, the case handlers shall refer the matter to the administering department or Review Committee and execute the resolution passed by the department or committee.
    7. Dispersion of Shareholding and Custodial Undertaking:
      8. Examine the following items:
      1. Whether the ratio of shares to be publicly offered is in compliance with the regulations of the TWSE.
      2. Whether shareholding dispersion after public offering is in compliance with the provisions of the TWSE Rules Governing Review of Securities Listings.
      3. Whether the ratio of shares held by directors is in compliance with the regulations of the competent authority.
      4. Whether the undertaking regarding the ratio of shares in centralized custody to total issued shares complies with regulations.
    8. Examine whether the applicant company is in compliance with each of the items listed in Article 9, Paragraph 1 or Article 31, Paragraph 1 of the TWSE Rules Governing Review of Securities Listings and complete the "Rules Governing Review of Securities Listings Article 9, Paragraph 1 Itemized Checklist" (Attachment 6) or "Rules Governing Review of Securities Listings Article 31, Paragraph 1 Itemized Checklist" (Attachment 6-1).
    9. The case handlers shall consolidate all the above review data and relevant documentation (Attachments 1 through 9) into a binder.
    10. To ascertain the actual status of the financial and business operations of the applicant company, the case handlers shall carry out an on-site audit and conduct the following procedures:
      1. Seek briefings to ascertain the following:
            ‧ The past business achievement and philosophy of the applicant company's responsible person.
            ‧ Changes in the shareholdings of directors, and shareholders with a greater than 10 percent share of the company's total issued equity during the most recent 3 fiscal years and random checks of actual shareholdings when necessary.
            ‧ Management and operational objectives of the company.
            ‧ Financial structure and management policies.
            ‧ Production processes.
            ‧ Production status.
            ‧ Analysis of sales income and costs and the state of competition in the industry.
            ‧ The system for taking stock of and valuating inventory, and warehousing management.
            ‧ Dealings among affiliates.
            ‧ Salary and benefit regime.
      2. Inspect factories, paying particular attention to the operational status of machinery and equipment.
      3. For other significant irregularities discovered in the documentary review, the case handlers may draft an inspection plan and then conduct an audit of the irregularities.
      4. Findings of on-site audits shall be recorded in detail in the "On-Site Audit Record" (Attachment 7).
    11. In order to clarify other major issues in relation to the current status and future development of the industry to which the company belongs, as well as financial accounting, taxes, legal issues, and other material issues arising from operations in that industry, the case handler may duly engage an expert as an external Review Committee member, and in addition to obtaining the opinion of that expert, may also seek the opinions of other experts on related questions with approval by the president of the TWSE of a written request for permission.
  2. Compilation of working papers: The case handlers shall consolidate and record in detail all review items and findings of the review, together with all relevant information and number them in order for cross-referencing. Upon completion of the review, the case handlers shall compile all review information (Attachments 1 through 7) and supporting documentation into a binder to serve as the working papers and file it together with other public issuance approval information and keep it in the custody of the Listing Department (for a minimum of 5 years) for future reference and case management.
  3. After completion of the working papers, the case handlers shall set forth the key findings, and may as necessary solicit the opinions of relevant experts and examine other relevant information. The case handler shall then compile this information into a"" proposal for reference during the review and deliberation of the case.
  4. Review Period: Applications for initial stock listing shall be submitted for deliberation by the Review Committee within six weeks after their receipt. Under extraordinary circumstances, however, the Listing Department may, based upon review requirements or at the request of the applicant company and no less than 10 days prior to the Review Committee meeting, extend the deadline for submission to the Review Committee, subject to the signed approval of the president of the TWSE. Extensions granted at the request of the applicant company shall be limited to a maximum period of a month.
  5. Force of the Securities Listing Review: The findings of the review of an application for securities listing reflect the financial and business condition of the applicant company during a specified period of time only, and should not be taken as a reflection of the overall or future performance of the applicant company. The results also depend largely on whether the applicant company has made full disclosure of information relating to its financial and business condition. The review results do not provide a guarantee of the quality of the applicant company and shall not be taken as a substitute for the functions and status of securities underwriters, CPAs and lawyers. Therefore, case handlers reviewing applications filed by first-time applicants shall:
    1. Carry out the review work with a positive service attitude and full rely on all information and opinions provided by the applicant company, securities underwriters, CPAs and lawyers, unless any nondisclosure, fraud, falsehood, or error is discovered.
    2. Where information or statements of opinion provided by the applicant company, securities underwriter, CPAs and lawyers are found to contain any nondisclosure, fraud, error, falsehood, or otherwise seriously violate applicable laws or the rules and regulations of the TWSE, those responsible shall be held fully liable under the law, and the matter shall be duly reported to the competent authority after handling by the TWSE pursuant to relevant regulations. The TWSE undertakes only the review and deliberation of applications. Case handlers shall, at the time of processing applications, act in accordance with the provisions of the TWSE Ethics Guidelines for Employees or Matters for Mutual Compliance by Securities Listing Review Committee Members, and remain detached, impartial, and objective to ensure compliance with all the procedural requirements of these Procedures and other applicable regulations. In the event of any violation or negligence, where verified through investigation, personnel shall be responsible for matters that fall within the scope of their duties.
    3. Where any concerns arise during the review period, the case handlers shall contact the applicant company, securities underwriter, CPAs and lawyers and request that they take the initiative to collect relevant information in timely fashion and provide explanations.
  6. Prior to the submission of the listing case for the review of the Review Committee, if the administering department has resolved to deny approval for listing, the TWSE's senior executive vice president shall convene relevant personnel to review the listing case again, and when necessary, invite the applicant company and the securities underwriter to provide explanations; if they resolve to deny approval for listing, the signed approval of the TWSE's president may be obtained and the application then rejected outright.
  7. Where an application for listing of stock on the Taiwan Innovation Board fails to meet the conditions of review of innovativeness, if the administering department resolves to deny the listing, it shall so report to the president then reject the application outright.
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Article 16     Document Review
  1. The case handlers shall draft a proposal with respect to the complete review findings and submit it to the Review Committee for reference during the review and deliberation of the case.
  2. Where the administering department's inspection finds an applicant company to fall under any of the conditions set forth in the TWSE Rules Governing Review of Securities Listings except in Article 9, Paragraph 1 , Subparagraph 8, 9, or 10, or Article 31, Paragraph 1, Subparagraphs 7, 8, or 9, or to violate any other applicable provisions of the same rules except Article 18, 19, 32, or 33, it shall give an explicit review opinion in the review report that listing may be approved upon overall consideration of the totality of factors.
  3. The review findings report, proposal information, applicant company's CPAs' audit report (including financial report), and outside reviewer's consulting opinion prepared in accordance with regulations shall be sealed by chop as confidential and submitted to each Review Committee member for evaluation no less than five days prior to the convening of the Review Committee. Each Review Committee member shall complete a review opinion chart listing their opinions regarding each item and specifying any questions they may have and submit the review opinion chart to the Listing Department two days before the Review Committee convenes. The Listing Department shall designate a person to be responsible for compiling the all materials and maintaining appropriate confidentiality, and the materials shall be reviewed when the Review Committee convenes.
  4. The TWSE shall, beginning three days prior to the convening of the Review Committee and at a specified location, make available for inspection by any member of the Review Committee the applicant company's relevant listing information, the case handler's audit report working papers, the CPAs' audit report working papers, the underwriter's assessment working papers and the working papers of the lawyers’ legal opinions etc. Review committee members that so require shall appear in person to inspect the documents.
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Article 18     When the Review Committee convenes, reviews shall conducted for the following in accordance with the TWSE Rules Governing Review of Securities Listings and other relevant laws, regulations, and materials:
  1. Initial stock listing applications free of any of the conditions provided in the subparagraphs of Article 9, paragraph 1 of the TWSE Rules Governing Review of Securities Listings and violating no relevant provisions of the same rules shall require approval of a simple majority of the Review Committee members present.
  2. Initial stock listing applications that meet any of the conditions provided in the subparagraphs of Article 9, paragraph 1 of the TWSE Rules Governing Review of Securities Listings, except subparagraphs 8, 9, and 10, or that violate any applicable provision of the same rules except Articles 18 and 19, and re-applications for initial stock listing, shall require approval of a two-thirds majority (inclusive) of Review Committee members present; however, the committee shall specify their overall considerations and concrete reasons for granting listing approval.
  3. Initial applications for stock listing on the Taiwan Innovation Board that are free of any of the conditions provided in the subparagraphs of Article 31, paragraph 1 of the TWSE Rules Governing Review of Securities Listings and violate no relevant provisions of the same rules shall require approval of a two-thirds majority (inclusive) of Review Committee members present; provided, however, that where any of the conditions provided in the subparagraphs of Article 9, paragraph 1 of said rules except subparagraphs 7, 8, and 9 is met, where any applicable provisions of the same rules except Articles 32 and 33 are violated, and in the event of a re-application for initial stock listing on the Taiwan Innovation Board, the Review Committee shall additionally specify their overall considerations and concrete reasons for granting listing approval.
  4. Where approval for listing has been granted by resolution of the Review Committee, the case shall be recorded and submitted to the board of directors. Where a decision is made to submit the application to the board of directors following submission of supplementary materials, the applicant company shall be notified in writing of a deadline by which the supplementation shall be completed, at which time the application shall be submitted to the board of directors. Where listing approval is denied by a resolution, signed approval of the TWSE's president shall be obtained and the application rejected outright.
    Applications submitted for reconsideration after rejection by the board of directors shall be handled in accordance with the preceding paragraph.
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