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Article NO. Content

Title:

Taiwan Stock Exchange Corporation Assessment and Auditing Procedures for Securities Underwriter Handling Initial Listing Applications  CH

Amended Date: 2021.03.31 (Articles 1, 4, 5, 6, 9, 10 amended,English version coming soon)
Current English version amended on 2020.03.02 
Categories: Primary Market > Review
8     The underwriter shall request lawyers to issue documents such as legal opinion on legal compliance in the most current three years by a domestic issuer and its incumbent directors, general manager, shareholders holding 10% or more shares and real responsible person and on the impact on the operation of the local issuer, and whether the action plans are comprehensive and adequate:
  1. Whether the issuing company violates applicable laws and regulations:
    1. the major laws and regulations of the central competent authority for the sector of industry the issuing company belongs to and those affecting the sector of industry;
    2. evaluate if the issuing company has acted pursuant to the laws and regulations governing disclosure of information of listed companies when disclosing the information; and
    3. other laws and regulations;
  2. Whether the directors, general manager, shareholders holding 10% or more of the total number of outstanding shares of the issuing company, real responsible person and other relevant personnel violate applicable laws and regulations and therefore breach good faith or compromise performance of duty;
  3. Whether any copyright, patents, trademark rights or any other intellectual property rights are infringed;
  4. major litigation, non-litigation or administrative disputes pending in court; and
  5. major labor disputes or environmental pollution events.
    When assessing a primary listing application of a foreign issuer, the underwriter shall request lawyers to issue legal opinions on the following with regard to the foreign issuer, incumbent directors, general manager, shareholders holding 10% or more of the total number of outstanding shares of the foreign issuer and real responsible person in the most current three years, and shall further evaluate the impact on the operation of the foreign issuer and action plans based on the lawyers' opinions:
  1. Whether the foreign issuer violates applicable laws and regulations:
    1. seriously violates the applicable labor safety and health laws and regulations of the jurisdiction where the issuer was incorporated or of the country where the issuer has its major presence, to the extent that the issuer has been ordered to suspend part or all of its operation;
    2. seriously violates the pollution control and prevention regulations of the jurisdiction where the issuer was incorporated or of the country where the issuer has its major presence;
    3. major labor disputes; and
    4. other laws and regulations.
  2. Protection of shareholders' equity:
    1. whether the restrictions on where a shareholders' meeting is convened, on the voting system or exercise of other shareholders' rights imposed by the law of the jurisdiction where the issuer was incorporated may influence the exercise of the shareholders' equity of the foreign issuer. If yes, describe the measures for protection of the exercise of shareholders' rights within the Republic of China; and
    2. whether the articles of incorporation or the memorandum of association include specific provisions on protection of the exercise of shareholders' equity;
  3. Whether the issuer has entered into any contract that imposes major restrictions on its operation or that is apparently unreasonable; and
  4. Same as Subparagraphs (B) to (D) of the preceding paragraph.
    When evaluating impacts on the operation of the issuing company described in Subparagraphs (A) to (E) of the first paragraph and Subparagraphs (A) to (D) of the second paragraph, the underwriter shall not adduce opinions provided by the regular legal adviser to the issuing company or the lawyer appointed by the issuing company to complete the "Legal Matter Checklist for Share Listing Applied for by Issuer". The lawyers to be contacted may not be the same as the regular legal adviser to the issuing company or the lawyer or CPA appointed by the issuing company to complete the "Legal Matter Checklist for Share Listing Applied for by Issuer" and may not work for the firm that maintains a substantial cooperation relationship with such adviser, lawyer or CPA, so as to ensure independence of the lawyers' opinions.