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Article 23
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When registering to offer and issue overseas convertible bonds with conditions of conversion, an issuer shall specify in the issuance rules the following particulars:
- The conversion procedure.
- The method for determining the terms and conditions of the conversion (including conversion price and conversion period).
- The conversion price and its adjustment.
- Entitlements to interest and dividends in the converting year.
- The method for handling funds that are not sufficient to convert into one unit of the securities upon conversion.
- When sponsoring issuance of overseas depositary receipts for conversion purposes, the issuer shall specify the type of underlying securities evidenced by overseas depositary receipts, the volume of securities evidenced by each unit of overseas depositary receipts, the names of depositary institutions and custodian institutions, the issuance plan for the overseas depositary receipts, and other agreed-upon terms and conditions.
- Statement of issuance methods: The statement of issuance methods shall state whether all the depositary receipts shall be publicly issued or a portion thereof shall be subscribed to by a specific person or persons through negotiation; if a portion thereof shall be subscribed to by a specific person or persons, then the statement of underwriting procedures shall state why the specific person or persons are being contacted to subscribe through negotiation, the number of depositary receipts to be subscribed to by a specific person or persons, the total dollar amount thereof, and the relationship between the specific person or persons and the issuer.
- Whether the obligation to convert the shares will be fulfilled by issuing new shares or delivery of outstanding shares (must be one or the other); provided that an emerging stock company shall fulfill the obligation only by issuing new shares.
- Other important matters agreed upon by the contracting parties.
When overseas corporate bonds are converted to shares, such conversion shall not be subject to the prohibition against issuance of shares below par value as set forth in Article 140 of the Company Act.
Unless there is applicable precedent in international practice, Section 2 of Chapter III of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall apply mutatis mutandis to matters relating to conversion of overseas corporate bonds.
Paragraph 1 shall apply to overseas convertible bonds where the issuer intends to meet future demand for bond conversions by using the shares it owns in a company listed on either the stock exchange or an OTC market, where such company meets the provisions of Article 3 of the TPEx Securities Review Regulations; unless there is applicable precedent in international practice, Article 26 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall apply mutatis mutandis thereto.
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