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Article NO. Content

Title:

Regulations Governing the Offering and Issuance of Securities by Foreign Issuers  CH

Amended Date: 2021.03.29 (Articles 3, 5, 6, 8, 9-1, 65 amended,English version coming soon)
Current English version amended on 2015.11.12 
Article 36      When a secondary exchange (or OTC) listed company sponsors issuance of TDRs, only after the TDRs are listed or traded on the OTC market may shareholders of the company engage the depositary institution to issue TDRs in Taiwan using shares that have already been issued and are held by the shareholders, in which case a filing shall duly be submitted with all of the relevant documents attached. The filing will become effective 7 business days from the date it is accepted for processing by the FSC and the institution designated by the FSC
     Where shareholders of a secondary exchange (or OTC) listed company engage a depositary institution to issue TDRs domestically using shares that have already been issued and are held by the shareholders, they shall engage a securities underwriter to conduct an evaluation and issue an evaluation report and to sell the depositary receipts on a firm commitment basis, and the securities underwriter shall deliver the prospectus on their behalf. The engaged depositary institution and custodian institution shall be the same depositary institution and custodian institution as were engaged by the secondary exchange (or OTC) listed company that sponsored issuance of the TDRs. And the rights and obligations of the stock represented by the TDRs shall be the same as the rights and obligations of the stock represented by the TDRs of which the secondary exchange (or OTC) listed company sponsored issuance. The securities underwriter shall explain the method and basis for the pricing of the issue.
     The content of the prospectus referred to in the preceding paragraph, in addition to the particulars required in accordance with the laws and regulations of the secondary exchange (or OTC) listed company's country of registration and country of listing, shall also specify the following items
  1. On the front cover of the prospectus, the TDR code shall be printed in the upper right hand corner, and the following items shall be printed in sequential order:
    1. Name of the company.
    2. The prospectus is prepared for purposes of an issue of TDRs: the source of the securities represented by the TDRs; the quantity of the securities represented; the total number of units issued; the price-setting method for the current issue; the premium/discount percentage of the issue price to the underlying stock price; the total monetary amount of the issue; the public underwriting percentage; the underwriting and allotment method. For the issuance plan, the internal page numbers to consult for the related content may be noted.
    3. The following content shall be printed prominently:
      1. Country of registration of the issuer.
      2. The issuer is a company that is a foreign enterprise listed in Taiwan, and the prospectus is prepared for purposes of the offering and issuance of TDRs in Taiwan by the depositary institution that has been engaged by shareholders of the secondary exchange (or OTC) listed company using shares that have already been issued and are held by them.
      3. An investor shall carefully read the contents of this prospectus, and shall note that, because the foreign issuer is not sponsoring this issue of TDRs, the investor should refer to the information publicly announced by the foreign issuer concerning its financial and business data and operating condition.
      4. The effective registration of the securities may not be used in any advertisement as proof of the veracity of registration particulars or as a guarantee the value of the securities.
      5. If there is any misrepresentation or nondisclosure in the content of the prospectus, the persons who have signed or sealed the prospectus shall be held liable in accordance with law.
      6. Web addresses for querying prospectus information, including the information disclosure website specified by the FSC.
    4. Date of printing.
    5. Related underwriting fees.
    6. In the event of any of the following circumstances, the company shall note the circumstance on the cover in a prominent font:
      1. Where there has been a change in the code of the TDRs, the original stock code shall be printed along with the new stock code in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
      2. Where there has been a change in the company name, the change shall be disclosed by printing the new and old names adjacently in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
    7. A prospectus prepared in order to register for public offering and issuance of securities shall note on its front cover that it is a draft version for the purpose of such registration.
  2. The inside front cover of the prospectus shall have the following items relevant to the current issue printed in sequential order:
    1. The prospectus distribution plan: specify the places where the prospectus will be displayed, the distribution methods, and the methods for requesting and obtaining the prospectus.
    2. Name, address, web address, and telephone number of the shareholder services agent.
    3. Name, address, web address, and telephone number of the depositary institution.
    4. Name, address, web address, and telephone number of the custodian institution.
    5. Name of the domestic lawyers who prepared the legal opinion, and the name, address, web address, and telephone number of the law firm. If opinions of any other lawyers are used (e.g. lawyers of the country of registration and the country of the principal place of business), the above information for those lawyers shall also be disclosed together.
    6. Address of website on which can be queried trading information of the country where the securities represented by the TDRs are listed and information on the finances and business of the company.
  3. The content of the prospectus shall specify the following items:
    1. Motivation and purpose for raising funds through the public offering.
    2. Method for setting the price and an explanation.
    3. Evaluation report provided by the securities underwriter.
    4. TDR issuance plan and matters stipulated therein.
    5. The principal content of the custody agreement (or other custody documents) and the depositary agreement.
    6. Any matters requiring attention in connection with restrictions on securities transactions by foreigner nationals, tax burdens, and tax payment procedures, of the secondary exchange (or OTC) listed company's country of registration and country in which its shares are listed.
    7. Rights exercisable by, or restrictions placed on, holders of the TDRs or the securities represented by the TDRs.
    8. The highest, lowest, and average market prices of the stock represented by the TDRs for the most recent 6 months on any securities trading markets on which it is listed and the closing price on the business day preceding the filing date. A note shall also be made stating the differences in each of the aforesaid market prices between the markets on which the security is listed. If the period of listing has been less than 6 months, the stated period may be the actual period of listing.
    9. Any other important stipulations or other matters that the FSC requires to be specified.
  4. The back cover of the prospectus shall be signed or sealed by more than half of the company's directors and by its general manager.
  5. The securities underwriter and its responsible person, CPAs, lawyers, and other experts shall sign or seal the prospectus indicating their endorsement of the part for which they are responsible.
    The draft prospectus shall be transmitted, as an electronic file in the format prescribed by the FSC, to the information disclosure website specified by the FSC and, within 30 days from the date of receipt of the notice of effective registration, the final amended prospectus shall be transmitted as an electronic file to the information disclosure website specified by the FSC, which shall be done by the depositary institution.
     The offering and issuance of TDRs in Taiwan by a depositary institution that has been engaged by shareholders of a secondary exchange (or OTC) listed company using shares that have already been issued and are held by them shall be subject mutatis mutandis to the provisions of Article 5, paragraphs 2 to 6; Article 7, paragraph 1, subparagraphs 1, 4 to 6, and 9 and paragraph 2; Article 8, paragraph 1, subparagraph 11; Article 9, paragraphs 1 and 3; and Article 10, paragraph 1, subparagraph 1 and paragraph 2.