Taiwan Stock Exchange - Rules & Regulations Directory

Article NO. Content

Title:

Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies 

Amended Date: 2019.03.07 
Article 9
    A public company shall specify the following matters in its Operational Procedures for Loaning Funds to Others, and shall comply with those Operational Procedures when loaning funds:
  1. Entities to which the company may loan funds.
  2. Evaluation standards for loaning funds to others:
    1. Where funds are loaned for reasons of business dealings, evaluation standards shall be specified for determining whether the amount of a loan is commensurate to the total amount of trading between the two companies.
    2. Where short-term financing is needed, the reasons for and conditions of extending loans shall be enumerated.
  3. The aggregate amount of loans and the maximum amount permitted to a single borrower shall each be prescribed separately for business transactions and for short-term financing respectively.
  4. Duration of loans and calculation of interest.
  5. Procedures for handling loans of funds.
  6. Detailed review procedures, including:
    1. The necessity of and reasonableness of extending loans to others.
    2. Borrower credit status and risk assessment.
    3. Impact on the company's business operations, financial condition, and shareholders' equity.
    4. Whether collateral must be obtained and appraisal of the value thereof.
  7. Announcement and reporting procedures.
  8. Subsequent measures for control and management of loans, and procedures for handling delinquent creditor's rights.
  9. Penalty for violation of these Regulations or of the company's Operational Procedures for Loaning Funds to Others by managers or personnel in charge.
  10. Procedures for controlling and managing loans of funds to others by subsidiaries.
  11. Other particulars required by the FSC.
    A public company that engages in short-term financing under Article 3, paragraph 5, in addition to complying with the preceding paragraph, furthermore shall perform enhanced risk assessment for, respectively, unsecured financing, financing to enterprises in any single industry, and financing to any single group of affiliated enterprises or members of a single corporate group, and shall prescribe limits on the amounts that may be loaned in such financing.

Interpretation:

Relevant Laws:

Data Source:Taiwan Stock Exchange - Rules & Regulations Directory
twse-regulation.twse.com.tw