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Article NO. Content

Title:

Taiwan Securities Association Rules Governing Underwriting and Resale of Securities by Securities Firms  CH

Amended Date: 2021.03.31 (Articles 4-1, 6, 7, 8, 9, 11, 18, 21-3, 22-1, 22-2, 23, 24, 25, 27-1, 28, 30, 40, 41, 42-1, 43, 43-1, 44, 52, 52-1, 73 amended,English version coming soon)
Current English version amended on 2016.04.12 
Article 40     Where a company listed on a stock exchange or an OTC market carries out a cash capital increase through an issue of ordinary shares in which all shares are put up for underwritten distribution, and all shares put up for public sale are allocated through the book building method, after the price has been set and the underwriting contract has been registered with the Taiwan Securities Association, the following matters shall be carried out:
  1. Day One: Publish an underwriting announcement and mail prospectuses and notices of payment due.
  2. Day Two: Payment period commences, and book building bid deposits not corresponding to allocated shares are returned to unsuccessful bidders.
  3. Day Three: Specified parties make payment; issuer applies to the TWSE or the TPEx to list certificates of payment for shares on a stock exchange or an OTC market.
  4. Day Four: Underwriter carries out underwriting on standby commitment basis; shareholders' register is completed.
  5. Day Five: Certificates of payment for shares are listed on a stock exchange or an OTC market.
  6. Day Six: Certificates of payment for shares are issued and listed on a stock exchange or an OTC market.
    If any of the dates set forth in the preceding paragraph falls on a weekend, regular holiday, or bank holiday, it shall be postponed by one day, and the dates that follow shall be postponed accordingly.
    The dates set forth under paragraph 1 may be changed if necessary by applying for approval with the Taiwan Securities Association.
    Where a company listed on a stock exchange or an OTC market carrying out a cash capital increase through an issue of ordinary shares uses the book building method to allocate all shares (other than those securities set aside for subscription by the company's employees) that are put up for underwritten distribution and public sale, those shares allocated to the company's employees may be handled in accordance with the provisions of paragraph 1, provided that said employees can comply with the payment period specified in paragraph 1.
    Where matters are undertaken in the manner set forth under paragraph 1, shares may be allocated on a priority basis to existing shareholders; provided, however, that the restrictions listed in Articles 27 and 43-1, paragraph 2 shall still apply.
    When a bidder submits a book building bid form, the securities underwriter may collect a bid deposit from the bidder of not more than 20 percent of the value of the securities bid for.
    The book building bid deposits not corresponding to allocated shares as referred to in the above paragraph 1 subparagraph 2 means the book building bid deposits paid by unsuccessful bidders, and bid deposits paid by lottery winners in excess of the amount required for securities actually allocated to them.
    The payment to be made by the bidder as referred to in paragraph 1 subparagraph 2 above shall be the price of the securities subscribed less any book building bid deposit remaining after the bidder has received (or not received) a refund in accordance with the provisions of the preceding paragraph. In the event a bidder does not fulfill his payment obligation within the allotted time, the securities underwriter may confiscate the book building bid deposit and shall retain for its own account said securities at the price offered to the bidder.
    A securities underwriter when collecting book building bid deposits as prescribed by paragraph 6 above shall do so by means of a trust, and shall specify in the trust contract the handling of default by the bidder and the damages for default..