Where, upon application, a subsidiary, other than a government-owned enterprise, applies for the listing of its stock but is unable to meet the requirements set forth in all the subparagraphs below, the TWSE shall disagree to the listing, notwithstanding the fact that its application meets the criteria set forth in these Rules:
When a subsidiary applies for TWSE listing pursuant to the proviso of subparagraph 6 of the preceding paragraph, any transfer of shares within the three years prior to the application for TWSE listing for purposes of reducing the parent company's shareholding in the subsidiary shall have been conducted in a manner in which the pre-emptive subscription right is given to the original shareholders of the parent company or another manner not detrimental to the rights and interest of the shareholders of the parent.
- A consolidated financial statement of the parent company and all of its subsidiaries which is prepared in accordance with the accounting principles of the home country of its parent company and an audit opinion issued by a CPA in the Republic of China stating the differences between the accounting principles applicable in the Republic of China and the accounting principles applicable in the home country of the parent company and the impact of such differences on such financial statement shall be submitted along with the application, unless the applicant company is applying for listing pursuant to paragraph 2 or 4 of Article 4, or Article 5, Article 6, or Article 6-1, or in the fiscal year of the application for listing and the most recent fiscal year the amount of purchase/sales transactions between it and its parent company is less than 10 percent of its total purchase/sales amount.
- According to the consolidated financial statement submitted pursuant to the preceding paragraph, the total amount of net worth shall be NT$1 billion or more in the most recent fiscal year and the profit before tax shall each represent 3 percent or greater of the total amount of net worth in each of the most recent two fiscal years, provided that such shall not apply where such event is the product of business nature, market demand and supply condition, government policy, or any other reasonable cause.
- The total number of shares of the applicant company held by the parent company and all of its subsidiaries, and by those companies' directors, supervisors, representatives, and greater than 10 percent shareholders, and by related parties thereof, shall not exceed 70 percent of the total number of its issued shares. If this 70 percent limit is exceeded, the applicant company shall conduct a pre-listing initial public offering to reduce the percentage of shares held by the aforesaid persons to 70 percent or lesser. However, the same does not apply where persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of no less than 300 million shares in the applicant company.
- The applicant company's operating revenue derived from its parent company in the fiscal year of the application for listing and in the most recent fiscal year shall not exceed 50 percent of its operating revenue; its principal raw materials or principal products or total amount of purchases [obtained from its parent company] during such periods shall not exceed 70 percent of its purchases. However, this restriction shall not apply where the cause is characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
- If the stock of the parent company is already traded on the TWSE (or the TPEx), at the time of its application for TWSE listing, the pro forma operating revenue or net operating income as stated in the pro forma consolidated financial statements for each of the most recent 4 quarters, excluding the financial data for the applicant company, and reviewed by a CPA, was not down by 50 percent or more from the operating revenue or operating income stated in the consolidated financial statements for the same period, and the parent company has not transferred any material customers or business within the most recent two fiscal years. However, this need not apply if the parent company and the subsidiary have different business types, industrial classifications, or product types, and moreover are not mutually competitive, or if it resulted from another reasonable cause.