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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 8     When a primary exchange (or OTC) listed company conducts a case under Article 6, paragraph 1, subparagraphs 1 to 3, or an emerging stock company conducts a case under Article 6, paragraph 1, subparagraphs 3 or 6, the FSC may reject the filing if any of the following circumstances exist:
  1. The present plan for the offering and issuance of securities is unfeasible, unnecessary, or unreasonable.
  2. Any previous plan for offering and issuance or private placement of securities has, without just cause, failed to be executed on schedule or failed to produce reasonable benefit. However, in the event more than 3 years have passed from the completion date of the plan until the filing date, such restriction does not apply.
  3. Any previous private placement of securities did not conform to Articles 43-6 to 43-8 of the Act or the provisions of the Directions for Public Companies Conducting Private Placements of Securities, where the circumstances are serious.
  4. Any important content of the present plan for the offering and issuance of securities (such as issuance rules, source of funds, or particulars of the plan) has not been placed on the agenda of a board meeting or shareholders meeting and adopted by resolution at such a meeting.
  5. The company has lent a large amount of money to another party for purposes other than financing needs arising from a business transaction with another company or business firm, and has not yet rectified the situation.
  6. The company has entered into a non-arm's-length transaction of material significance, and has not yet rectified the situation.
  7. The company is filing for registration of a cash capital increase or issue of corporate bonds, but holds financial assets listed under current assets, idle assets, or investment property with no plan to actively dispose of or develop such holdings, and their total value is equivalent to either: (1) 40 percent or more of the equity in the most recent financial reports audited and attested, or reviewed, by a CPA, or (2) 60 percent of the total amount of funds to be raised through the cash capital increase or corporate bond issuance. However, this provision does not apply if the funds to be raised will be used to purchase real estate, plants, or equipment, and there is a concrete fund raising plan evidencing the need to raise the funds.
  8. The company has failed to prepare its financial statements in accordance with relevant acts or regulations and with applicable accounting principles, where the circumstances are of material significance.
  9. Any circumstance in violation of Article 4, paragraph 3.
  10. The internal control system is materially deficient in design or implementation.
  11. The company's share price fluctuated abnormally during the month prior to the date of filing.
  12. The foreign issuer or its current chairperson, general manager, or de facto responsible person has received a sentence of imprisonment for a fixed term or a more severe punishment from a court in the past 3 years due to violation of laws governing business and industry or due to a crime involving breach of faith such as corruption, malfeasance, fraud, breach of fiduciary duty, or embezzlement, or has an obligation for damages arising from a violation of securities laws or regulations and has failed to duly perform the obligation.
  13. A subscriber, or an ultimate source of subscription, of the present offering and issuance of overseas securities is a related party of the foreign issuer. The term "related party" is as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
  14. The securities underwriter, at the time the foreign issuer files for registration, has received cumulatively 10 demerit points in the most recent year from the FSC, TWSE, TPEx, and Taiwan Securities Association, and three months have not elapsed since the date when the demerit points cumulatively reached 10 points. However, this restriction does not apply to an issue of new shares for cash capital increase that are to be sold in the public sale prior to an initial exchange or OTC listing.
  15. As the FSC otherwise deems necessary to protect the public interest.
    When a foreign issuer conducts a case under Article 5, paragraph 1, subparagraph 2, the provisions of subparagraph 7 of the preceding paragraph need not apply; if the underwriter evaluation report clearly states the feasibility of the capital allocations and the reasonableness of the expected benefits of the present plan for offering and issuance of securities, then the provisions regarding the necessity of the plan, as set out in subparagraph 6 of paragraph 1 of the preceding article and in subparagraph 1 of the preceding paragraph, need not apply.
    When a primary exchange (or OTC) listed company issues new shares in connection with a merger, acquisition of shares of another company, or acquisition or demerger, the provisions of subparagraphs 2, 5, 11, and 12 of paragraph 1 need not apply.
    When a primary exchange (or OTC) listed company issuing overseas straight corporate bonds has engaged a securities underwriter to publicly underwrite the bonds, the provisions of paragraph 1, subparagraph 11 need not apply.
    When a secondary exchange (or OTC) listed company conducts a case under Article 6, paragraph 1, subparagraphs 1, 4, or 5, the subparagraphs of paragraph 1 hereof shall apply mutatis mutandis. However, if it is issuing new shares or sponsoring issuance of TDRs in connection with a merger, acquisition of shares of another company, or acquisition or demerger, it may be exempted from the mutatis mutandis application of subparagraphs 2, 5, 11, and 12 of paragraph 1.