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XIII.Others
- Prohibition of trading outside of centralized market (Securities and Exchange Act §150):
Trading of listed securities shall be conducted on a centralized securities exchange market operated by TWSE, or violators are to bear criminal liability pursuant to Article 177, Paragraph 1, Subparagraph 1 of the Securities and Exchange Act, except in the following situations:
- Trading in government bonds.
- Due to the operation of an act or regulation, the transacting parties are unable to acquire or dispose the ownership of the securities through trading on the centralized securities market, for example, in the case of inheritance.
- Direct private transfer of securities not in excess of one trading unit, and the interval between any two such transfers is not less than three months. Pursuant to Article 10 of the Securities and Exchange Act Enforcement Rules, an interval of less than three months between two transfers is identified as below:
- Each direct sale and purchase between private parties shall count as one act, provided a sale or purchase of the same security within the same day may count as one act so long as the accumulated number does not exceed one round lot.
- A direct private transfer on the same day commences from the date the purchase and sale occurs. Where the date of the act of transfer cannot be proven, the act is deemed to commence from the date it takes place. In case this cannot be shown, the date of transfer shall be based on the date the transferee files the request with the company to amend the shareholders registry.
- other transactions that conform to FSC stipulations, for example, where a shareholder requests the company pursuant to Article 317 of the Company Act to acquire the shareholder's shares, a listed company engages in a share conversion pursuant to Article 12 of the Business Mergers And Acquisitions Act or Articles 24, 26 and 32 of the Financial Holding Company Act, or proceeds with public tender offer pursuant to Article 43-1, Paragrapgh 2 of the Securities and Exchange Act.
- Mandatory dispersal of shareholding:
In view of the widespread existence of family businesses in Taiwan, where both ownership and management rights are highly consolidated in most cases, dispersal of shareholding is stipulated for the purposes of diversification of enterprises and popularization of invenstments:
- Issuance of new shares to increase the capital by an issuer (Securities and Exchange Act §22-1):
The FSC may prescribe the shareholding dispersal standards for the issuance of new shares to increase the capital by an issuer under the Securities and Exchange Act. The Regulations Governing the Administration of Shareholder Services of Public Companies shall be prescribed by the FSC.
- Percentage of newly issued shares to be allocated for public offer (Securities and Exchange Act §28-1):
- In cash offering of new shares, a publicly held company whose stocks are neither listed on a stock exchange nor traded on the over-the-counter market and whose ownership dispersal fails to meet the standards prescribed by the FSC pursuant to Article 22-1, Paragraph 1 of the Securities and Exchange Act, shall set aside 10% (unless a higher percentage is determined by a resolution of the shareholders meeting) of its new issues to be publicly offered, unless such a public offering is deemed unnecessary or inappropriate by the FSC; Article 267, Paragraph 3 of of the Company Act which allows the original shareholders the rights to priority subscription to new issues, is not applicable.
- In cash offering of new shares by a public issued company whose stocks are either listed on a stock exchange or traded on the over-the-counter market, the FSC may require 10% (unless a higher percentage is determined by a resolution of the shareholders meeting) of its new issues to be offered at the market value to the public; in such circumstance, Article 267, Paragraph 3 of of the Company Act, which allows the original shareholders the rights to priority subscription to new issues, is not applicable.
- The value of the shares publicly offered in compliance with Paragraphs A and B and the value of the shares in the same issue reserved for subscription by the employees and original shareholders shall be identical.
- Change of content of listed securities (Operating Rules §45):
- Application procedure:
Where the name, type of securities, price per unit, outstanding shares, or other contents are changed, the changes shall be processed in accordance with laws and regulations, and thereafter the "Application for Amending the Listed Securities Registers" shall be completed and sent together with the "Plan for Exchange of Securities Certificates" to the TWSE to apply for change of content of the listed securities. After the TWSE reports the case to the FSC for recordation, the listed company shall send the required documents to the TWSE and file a report on the Internet information reporting system designated by the TWSE within the time period specified by the TWSE, and before the last day the shareholders list may be changed. The content of the Plan for Replacement of Share Certificates is governed by the TWSE Procedures for Replacement of Securities Certificates by Listed Companies.
- In the case of change of the company name, within three years from the approval date of such change, all the issued securities and other information to be published as required shall be disclosed in the new name as well as the old name. For three consecutive months after the company name change, said information shall be publicly announced in the material information on the Market Observation Post System on the TWSE website.
- In the case of capital reduction registration, the procedural provisions for delivering the new replacement securities by scripless book-entry transfer shall be carried out within 3 months from the date on which the exchange plan in the "Plan for Exchange of Securities Certificates" submitted to the FSC is approved. Thereafter, the said exchange plan shall be actually implemented. If the issuance of new replacement shares resulting from capital decrease is likely to fall behind schedule or there might be any abnormal situation, the TWSE shall be notified in writing in advance; provided, however, that issuance of new replacement shares may be waived in the case of buy back of treasury stocks and cancellation of shares under Article 28-2 of the Securities and Exchange Act.
- Listing date of newly replaced stocks:
- Until the volume of the total newly replaced stocks reaches 30% of its total listed shares, the listed company may not designate the listing date of the new shares (identical to the last day of trading of old shares) and submit an application to the TWSE, for public announcement and implementation after review and approval by the TWSE.
- Where the volume of the total newly replaced stocks fails to reach 30% of total listed shares of the listed company, if the listed company makes a written undertaking that starting from the date the new shares are traded, the replacement procedures will be commenced and any old shares received will be replaced with new shares on the same date, the procedures in Paragraph A above shall apply. If it does not issue the written undertaking, the designation of the listing date of the new shares (identical to the last day of trading of old shares) shall not at the latest be later than 30 days after the first date on which the old shares are replaced with new shares. Further, commencing from the above date, it shall continue with the replacement procedures and issue new replacement shares on the same date on which it receives the old shares.
- Change of content of securities of a foreign company
The procedures in 1 and 2 above will apply to any change in connection with stocks issued by a secondary listed company or securities of a foreign company represented by Taiwan Depositary Receipts issued by a foreign issuer and its depositary institution.
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