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VIII.Disclosure of information
- Material information required to be disclosed
- Pursuant to Article 3, Paragraph 1 of the TWSE Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities, a listed company under any of the following circumstances (Article 2I of the above procedures) shall input the content or explanation of the material information concerned onto the Internet information reporting system designated by the TWSE before the commencement of trading hours of the trading day following the date of occurrence or media reportage of the event:
- Dishonor of a negotiable instrument due to insufficient deposits and notation of settlement subsequent to dishonor of a negotiable instrument, being discredited by the clearing house, or other loss of credit of a listed company or a responsible person, parent company, or subsidiary thereof, or a material change in shareholding of the parent company; or, after dishonor of a negotiable instrument of a listed company due to insufficient deposits or being discredited by the clearing house, any alteration of trading method, suspension of trading, or delisting of the stock thereof, and the status of any application to the original conditions.
- Any material effect on company finances or business resulting from any litigious or non-litigious matter, administrative disposition, contentious administrative procedure, provisional attachment, provisional injunction, or compulsory execution, with respect to a listed company or a responsible person thereof; or a chairperson or managerial officer of the company violates the Securities and Exchange Act, Futures Trading Act, Company Act, Banking Act, Insurance Act, Act Governing Bills Finance Business, Financial Holding Company Act, or Commercial Accounting Act, or is indicted for a crime of corruption malfeasance in office, fraud, breach of trust, or misappropriation.
- Any material eff restoreect on company finances or business resulting from any serious decrease in output or complete or partial suspension of work, leasing out of a company plant or principal equipment, or pledge or mortgage of all or a principal portion of a company's assets.
- Any event set forth in Article 185, paragraph 1 of the Company Act of the Republic of China (ROC).
- Reorganization or bankruptcy procedure of a listed company or parent or subsidiary thereof, and any and all events occurring in the course of such procedure, including any petition made to a court and any notice given or ruling handed down by a court, or any ruling prohibiting transfer of shares or any precautionary measure ordered by a court under relevant laws, or any material change in any of the above matters.
- Appointment of or change in chairman, general manager, a juristic-person director or supervisor or representative thereof, an independent director, a natural-person director or supervisor, or a member of the functional committee established pursuant to the Securities and Exchange Act, or change in one-third or more of directors, or in the case of a primary listed company, where there is no independent director with a registered household address in the ROC.
- Change of certified public accountant (CPA) for any reason other than internal adjustments within the certifying accounting firm.
- A change of spokesperson, acting spokesperson, principal financial officer, principal accounting officer, research and development officer or chief internal auditor of the company.
- Change in accounting year.
- Any material effect on company finances or business resulting from any signing, amendment, termination, or rescission of an important memorandum of understanding, a plan for a strategic alliance or other business cooperation or mutual non-competition commitment, or an important contract, change in any material respect of a business plan, completion of development of a new product, or successful development and formal entry into the full-scale production stage of an experimental product.
- Resolution by the board of directors to carry out a capital reduction, merger or consolidation, division, acquisition, exchange or conversion of shares or transfer of shares from another, dissolution, issue of new stock for capital increase, record date of a capital reduction or cash capital increase, issue of corporate bonds, issue of employee stock option certificates, issue of new restricted employee shares, issue of other securities, private placement of securities, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof, or any material change in any of the above matters; or failure by companies participating in a merger, consolidation, division, acquisition, or transfer of shares from another, to convene on the same day and pass resolutions by their boards of directors or shareholders meetings, or inability to convene a subsequent shareholders meeting of a company participating in a merger, consolidation, division, acquisition, or transfer of shares from another, or veto by either side of the proposal for merger, consolidation, division, acquisition, or transfer of shares from another; or resolution of the board of directors to cancel a merger or consolidation during the implementation of the merger or consolidation plan following the initial board resolution in favor of the merger or consolidation.
- The date and relevant financial and business information in connection with any disclosure through a press conference or investor conference held by a company or by any other means, that has not been entered into the Market Observation Post System.
- Resolution by the board of directors to publish financial forecast information, inapplicability of the above financial forecast information, or correction or updating of such financial forecast information, or, in the case of a company that has published complete financial forecasts, the difference between the self-assessed income before tax as publicly disclosed and filed within a month after the close of the year and the financial forecast as last publicly disclosed and filed reaches 20% or above, and the sum involved reaches NT$30 million and 0.5% of the paid-in capital, or the difference between the income before tax stated in the publicly disclosed and filed annual financial report and the self-assessed income before tax of the previous year as publicly disclosed and filed within a month after the close of the year reaches 20% or above, and the sum involved reaches NT$30 million and 0.5% of the capital. In the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the aforesaid 0.5% of the paid-in capital shall be substituted by 0.25% of the shareholder equity.
- Resolution by the board of directors to distribute or not to distribute dividends, or a change in dividend distributions by a resolution of the board of directors or a shareholders meeting, or resolution of a record date for dividend distribution.
- Resolution by the board of directors or a shareholders meeting to directly or indirectly carry out an investment plan of an amount reaching not less than 20% of the company's paid-in capital or NT$1 billion, or any material change in any of the above matters. In the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the aforesaid 20% of the paid-in capital shall be substituted by 10% of the shareholder equity.
- A change by resolution of the board of directors in a plan for capital increase by cash or offering of corporate bonds after such plan has become effective upon registration, or a change by resolution of the board of directors in a plan for private placement of securities after passage of the plan by a resolution of the board of directors or a shareholders meeting.
- Resolution of the board of directors on the date for convening an ordinary shareholders meeting or special shareholders meeting, the cause or subjects of such a meeting, or the date of suspension of changes to entries in the shareholders' roster.
- Important resolution of a regular shareholders meeting or special shareholders meeting.
- There is any material event of internal control fraud, non arms-length transaction, or defalcation of assets.
- An acquisition or disposal, by the listed company or by a subsidiary whose shares have not been publicly issued domestically, of assets within the scope of Article 3 of the Regulations Governing Acquisition or Disposal of Assets by Public Companies adopted by the competent authority and where the circumstances of Article 30 or 31 of those Regulations require public disclosure and filing, except where public disclosure has already been made of a merger, consolidation, division, acquisition, or transfer of shares from another pursuant to Article 2, Paragraph 1, Subparagraph 11 of these Procedures and he the information pertains to derivatives trades that must be reported each month. An acquisition by a listed company of any type of domestic open-end fund that is not privately placed is not required to disclose material information. Public disclosure and filing is required in the event of any unrealized losses on derivatives trading amounting to 3% or more of the shareholder equity.
- Resolution by the board of directors (or a shareholders meeting) to permit a managerial officer (or director) to engage in competitive conduct, or knowledge by the company that a managerial officer is operating the same kind of business independently or on behalf of another person, or a director is involved in conduct within the company's scope of business independently or on behalf of another person, and the investment or business that the managerial officer or director is engaged in is a Mainland-area enterprise, and there has been any failure to duly obtain permission from the board of directors (or a shareholders meeting), or there is any material change in any of the above matters.
- Public disclosure and filing of endorsements and guarantees by the listed company as required under Article 25 of the Regulations Governing Loans of Funds and Endorsements and Guarantees by Public Companies.
- Public disclosure and filing of monetary loans to other persons by the listed company as required under Article 22 of the Regulations Governing Loans of Funds and Endorsements and Guarantees by Public Companies promulgated by the competent authority.
- Acquisition or disposal of privately placed securities by a listed company or a subsidiary thereof.
- Suspension of business transactions in part or in whole between the listed company and a major purchaser or supplier, where the purchaser or supplier accounted for 10% or more of the company's total amount of sales or purchases in the last fiscal year.
- Occurrence of a disaster, group protest, strike, environmental pollution event, or any other material event, where the company incurs a material loss, or where a relevant authority orders suspension of work, suspension of business, termination of business, or revokes or voids a permit pertaining to pollution, or where the administrative fines amount to NT$1 million or more.
- Finalization of negotiation results of a negotiation meeting called between the listed company and a creditor bank.
- Dishonor of a negotiable instrument, filing for bankruptcy or reorganization, or any other similar circumstance, on the part of a related party of the listed company or principal debtor to the company or a joint and several guarantor of a principal debtor; or inability by a principal obligor, in favor of whom the listed company has made an endorsement or guarantee, to settle a matured negotiable instrument, loan, or other obligation.
- Any re-filing and public disclosure of the regular annually filed internal control system statement due to any change in the content thereof; or obtaining of the Internal Control Special Audit Report for the special audit of internal controls conducted by the CPA.
- Failure to make a public disclosure or a filing within a prescribed time limit; an error or omission in a financial report prepared by a listed company, with respect to which Article 6 of the Enforcement Rules to the Securities and Exchange Act requires a correction to and further a restatement of the financial report; a CPA issues an audit or review report containing an opinion other than an unqualified or modified unqualified opinion on a publicly disclosed and filed financial report, except where annual amortization of losses is permitted by law or the CPA issues an audit or review report containing a qualified opinion when the amount and gains and losses of long-term equity investments in the financial reports of the first and third quarters and the semiannual financial reports as calculated on the basis of the investee company's financial reports have not been audited or reviewed by a CPA.
- Mass media reports or information provided by investors are sufficient to affect the market price of securities of a listed company.
- Insufficient centralized custody ratio after stocks have been placed in centralized custody pursuant to regulations and prior to expiry of the custody period, as the result of withdrawal, due to a court execution order or some other reason, of stocks of personnel whose stocks had been placed in centralized custody.
- Occurrence of any of the changes in shareholding set forth in Article 369-8, Paragraph 1 or 2 of the Company Act and receipt of notice of the same.
- A director or supervisor is subject to a provisional injunction suspending it from the exercise of their powers; or a director is subject to a provisional injunction suspending it from the exercise of powers, and the board of directors is thereby rendered unable to exercise its powers.
- Any matter required to be publicly disclosed and filed by the company pursuant to the Regulations Governing Share Repurchase by Listed and OTC Companies or the TWSE Regulations Governing Repurchase of Listed Securities by Foreign Issuers.
- On account of a capital reduction, completion of amendment registration of a change to capitalization, passage of a plan for share replacement operations, any subsequent failure to execute such share replacement plan, or at the time of announcement of the financial report, the listing procedures for the new shares replacing the old ones due to the capital reduction have yet to be completed, resulting in a discrepancy between the number of common shares used as the calculation basis for net worth per share in the financial statement and the number of outstanding shares.
- Issuance of an undertaking upon applying for listing and subsequently inability to perform the undertaking; failure to carry out remedial procedures within three months of the day of the aforesaid occurrence.
- Any matter required to be publicly disclosed and filed pursuant to the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company.
- Revocation by the competent authority of the permit of a financial holding company, or penalization of said company by the competent authority for violation of the Financial Holding Company and relevant regulations; or the loss by such company of controlling shareholding in a subsidiary, as defined by Article 4, Subparagraph 1 of the Financial Holding Company Act, where the competent authority has ordered remediation within a certain time limit.
- Increase or decrease in the number of held companies of an investment holding company.
- Resolution by the board of directors or a shareholders meeting to apply for termination of listing for trading of its securities, or any material change in such a matter.
- Objection or expression of reservation by an independent director or a member of the remuneration committee about a resolution by, respectively, the board of directors or a remuneration committee meeting, that has been included in a record or stated in written; for a listed company that has established an audit committee, any matter adopted with the approval of two-thirds or more of all directors without having been passed by the audit committee; any remuneration passed by the board of directors that is more favorable than the suggestion by the Remuneration Committee.
- Forfeiture by the directors and supervisors as a whole of subscription rights to shares in a number reaching one-half or more of subscribable shares upon cash capital increase of a listed company, and opening of the shares for subscription by a specific person or persons through negotiation.
- Where a listed company holds more than 70% of the total issued shares or total share capital of a TWSE listed (or GTSM listed) subsidiary thereof; or where 70% of the total issued shares or total share capital of a listed company is held by another TWSE listed (or GTSM listed) company.
- If a listed company issues securities outside of Taiwan, the making of any adjustment for differences in the overseas financial report due to inconsistency in the accounting principles applied in the two places with respect to financial information filed for any period in the place of overseas listing; or if the financial report of a primary listed company is not prepared according to the accounting principles adopted by the ROC, the differences in items between the accounting principles employed and those of the ROC and the monetary amounts affected, and the certifying CPA's opinion on the aforementioned matters.
- If the circumstances set forth in Article 53-25 of the TWSE Operating Rules exist. If the TWSE listed company is required to carry out share replacement operations due to a capital reduction, and the transferee company of the demerger is neither a TWSE listed nor a GTSM listed company, then three business days before the date on which trading will resume, public disclosure and filing shall be made of the following information for the demerged company and the transferee company of the demerger for the day prior to the record date of the demerger: the unaudited or CPA-reviewed share capital, net worth, and net worth per share, and the CPA-attested (or reviewed) earnings per share for the most recent period.
- Any other material policy resolution of the board of directors of a listed company or an affiliate thereof, or other circumstances having a material effect on the shareholders' equity or securities prices.
- Material information of a non-TWSE and non-GTSM listed major subsidiary of a listed company shall be deemed material information of the listed company where any circumstance under Paragraph 1 applies to such subsidiary. The term "major subsidiary" means a subsidiary conforming to the definition in generally accepted accounting standards to which any of the following circumstances has applied in the last two years or a subsidiary that the CPA deems to have a significant effect on the audited entity's financial reports:
- Where that subsidiary alone serves as a source of 30% or more of the operating revenue of the listed company.
- Where that subsidiary alone serves as a source of 50% or more of the quantity or total purchase amount of the major raw materials or major merchandise of the listed company.
- Where that subsidiary alone serves as a source of 50% or more of total output value (including self-manufacture, outsourcing, and purchasing from third parties) of the listed company.
- Where the listed company has original investments in that subsidiary alone in an accumulated amount up to 40% of the capital stock of the listed company and also NT$300 million or more, as shown in the financial reports of the listed company. In the event of a foreign issuer with no par value or a par value other than NT$10, the aforesaid 40% of capital stock shall be substituted by 20% of shareholder equity.
- Where the listed company has loaned funds and provided endorsements/guarantees in favor of that single subsidiary in a total amount up to 40% of the listed company's net worth and also NT$300 million or more.
- Where the income before tax of that subsidiary alone accounts for 50% or more of that of the listed company as shown on the consolidated financial statements of the listed company and also NT$300 million or more.
- Circumstances calling for a press conference
- Pursuant to Articles 2 and 3 of the TWSE Procedures for Press Conferences Concerning Material Information of Listed Companies, if any circumstance below applies to a listed company or it discovers any mass media reportage of the following diverges from facts, the listed company shall complete a "Report to Convene a Press Conference Concerning Material Information," specifying the content of the information, and deliver such report to the TWSE for handling:
- Dishonor of a negotiable instrument due to insufficient deposits, being discredited by the clearing house, or other loss of credit of a listed company or parent company or subsidiary thereof.
- Any litigious or non-litigious matter, administrative disposition or contentious administrative procedure, with respect to a listed company or a responsible person thereof, which has a material effect on the finances or business of the company
- Serious decrease in output or complete stoppage of work.
- Any event set forth in paragraph 1 of Article 185 of the Company Act of the Republic of China.
- Resolution by the board of directors of a listed company or parent or subsidiary thereof to petition a court for bankruptcy or reorganization, or a petition by a third party to a court for bankruptcy or reorganization; or a court ruling prohibiting transfer of the company's shares pursuant to relevant laws and regulations.
- Signing or rescission of an important memorandum of understanding, strategic alliance, plan for business cooperation or important contract, or change to important content of a business plan or completion of development of a new product.
- Resolution by the board of directors for capital reduction, merger or consolidation, cancellation of merger or consolidation, spin-off, acquisition, acquisition of shares, dissolution, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof; or inability to convene a subsequent shareholders' meeting of a company participating in a merger, consolidation, spin-off, acquisition, or acquisition of shares, or veto of the proposal for merger, consolidation, spin-off, acquisition, or acquisition of shares; provided, this shall not apply to cases under the following two circumstances:
- A merger conforming to Article 18, Paragraph 6 of the Business Mergers and Acquisitions Act, where the merged/acquired enterprise is a company not listed on the TWSE or GTSM and has a paid-in capital of less than NT$1 billion, or a merger/acquisition conducted in accordance with Article 19 of the Business Mergers and Acquisitions Act. If the merged/acquired enterprise is a foreign issuer with shares having no par value or a par value other than NT$10, the above-mentioned paid-in capital shall be substituted by shareholder equity.
- Capital reduction by a major subsidiary
- Occurrence of a material event of internal control-related malpractice, non arms-length transaction, or defalcation of assets.
- Finalization of negotiation results of a negotiation meeting called between the listed company and a creditor bank
- Transactions between the listed company and related parties:
- Acquisition or disposal of securities investments, real property and other fixed assets and claims of financial institutions, where the monetary amount of each transaction or of cumulative transactions with a same trading counterpart within one year reaches 20% of the company's paid-in capital or NT$300 million or above; in the event of a construction contractor, acquisition or disposal of real property for business use, where the monetary amount of each transaction or of cumulative transactions with a same trading counterpart within one year reaches 20% of the company's paid-in capital or NT$500 million or above. In the case of a foreign issuer with shares having no par value or a par value other than NT$10, the above-mentioned 20% of paid-in capital shall be substituted by 10% of shareholder equity. However, this requirement shall not apply to the following circumstances:
- A financial holding company, banking enterprise, insurance enterprise, securities enterprise, or any subsidiary thereof, acquiring or disposing of publicly offered R.O.C. open-end funds issued by an associated company, or engaging in bill or bond transactions.
- Capital increase of a subsidiary.
- Occurrence of a disaster, group protest, strike, environmental pollution event resulting in a disposition by a competent authority, where the anticipated insurance-indemnified loss exceeds 20% of the company's paid-in capital or NT$300 million or more. In the case of a foreign issuer with shares having no par value or a par value other than NT$10, the above-mentioned 20% of paid-in capital shall be substituted by 10% of shareholder equity.
- A report in the mass media or any information provided by any investor sufficient to affect the price of securities of the listed company.
- Voidance of the permit of a financial holding company by the competent authority thereof, or loss by a financial holding company of statutory controlling shareholding in a subsidiary thereof, where the competent authority has ordered remediation within a certain time limit.
- Resolution by the board of directors or a shareholders' meeting to apply for termination of listing for trading of its securities
- Where a listed company holds more than 70% of the total issued shares or total share capital of a TWSE (or GTSM) listed subsidiary thereof; or where 70% of the total issued shares or total capital of a listed company is held by another TWSE (or GTSM) listed company.
- Any other circumstance with a material effect on shareholders' equity or securities prices or any major policy resolutions of the board of directors of the company.
- In the event of a subsidiary of a listed company that meets the standards in Article 2-1 of the Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities, or in the event of the parent company of a listed subsidiary, Where any circumstance above applies to such subsidiary's R.O.C. parent company which is non-TWSE and non-GTSM listed, it shall be deemed material information of the listed company, in which case the listed company shall hold a press conference.
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