| Article 1 |
These Operation Directions are adopted pursuant to Article 12-2, paragraph 1, subparagraph 17 of the Taipei Exchange Rules Governing Securities Trading on the TPEx.
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| Article 2 |
The TPEX shall examine the information that a TPEx listed company files each month on changes in the shareholding of its insiders in accordance with Article 3, paragraph 1, subparagraph 9 of the Rules Governing Information Reporting by Companies with TPEx Listed Securities, to ascertain whether any event specified in Article 12-2, paragraph 1, subparagraph 17 of the Taipei Exchange Rules Governing Securities Trading on the TPEx has arisen.
If upon examination as mentioned in the preceding paragraph it is found that the TPEx listed company has become a subsidiary of another TPEX listed (or TWSE listed) parent company with greater than 70 percent shareholding, a report shall be filed with the competent authority for approval of termination of the TPEx trading of the company’s securities. After approval by the competent authority, the TPEx shall publicly announce the termination 40 days before the implementation date in accordance with paragraph 4 of the above-cited Article 12-2. If the parent company is a TWSE listed company, the Taiwan Stock Exchange Corporation shall also be notified.
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| Article 3 |
A TPEx listed company (including one that is a financial holding company or investment holding company) that holds more than 70 percent of the total issued shares of a TPEX listed (or TWSE listed) subsidiary shall issue an undertaking to unconditionally purchase all remaining outstanding shares of that subsidiary in accordance with Article 12-2, paragraph 6 of the TPEx Rules Governing Securities Trading on the TPEx.
If the purchase to be conducted under the preceding paragraph falls under Article 11, paragraph 1 of the Regulations Governing Public Tender Offers for Securities of Public Companies (hereinafter, the "Public Tender Offer Regulations") of the competent authority, the purchase shall be conducted in compliance with the requirements set forth in the Public Tender Offer Regulations.
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| Article 4 |
If a TPEx listed parent company comes under a circumstance referred to in the preceding Article, it shall, within 10 days from the date of delisting of that subsidiary from the TPEX (or TWSE), file a report with the TPEX in which it shall include the purchase plan, the undertaking to unconditionally purchase all remaining outstanding shares of that subsidiary, and other relevant supporting documents.
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| Article 5 |
The purchase plan referred to in the preceding article, unless otherwise provided, shall specify the matters set out in the following subparagraphs:
- Proposed purchase period.
- Proposed total number of outstanding shares to be purchased and the percentage of that subsidiary’s shares to which they amount.
- Purchase price and the method of calculation thereof.
- Method for receipt and payment of the funds and securities.
- Name and address of the unit or institution responsible for the receipt and payment of the funds and securities.
- With respect to requests for purchase made by minority shareholders after the expiration of the scheduled purchase period, the method for the receipt and payment of funds and securities, and name and address of the unit or institution responsible for the receipt and payment of the funds and securities.
The commencement date of the proposed purchase period referred to in the preceding paragraph shall be within one month after the securities of the subsidiary are delisted from the TPEX listed (or TWSE listed) subsidiary, and the period shall be 50 days in duration. Furthermore, settlement shall be conducted after the expiration of the purchase period. The purchase price shall not be lower than the simple arithmetic mean of the closing securities price during the three months prior to the date on which the securities of the subsidiary are delisted from the TPEx (or TWSE), and also shall not be lower than the net value per share of the securities of the subsidiary as stated in its CPA audited or reviewed financial report for the most recent period.
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| Article 6 |
If the TPEX case handling officer reviewing the purchase plan under the preceding article finds that it is in conformance with the requirements set out above, he or she shall draft and sign their review opinion and submit it for written approval, after which the TPEx will issue a written reply to the TPEx listed parent company. The TPEx case handling officer additionally shall review whether the case falls under the requirements of Article 11, paragraph 1 of the Public Tender Offer Regulations, and if so, the TPEx shall further notify the competent authority.
The TPEx listed parent company shall, within two days from the date of receipt of the TPEx reply letter, make an indication of intent to the remaining shareholders of the TPEx (or TWSE) listed subsidiary to purchase the shares held by them in accordance with the purchase plan acknowledged in the TPEx reply letter, and proceed with the purchase in accordance with the plan.
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| Article 7 |
After the TPEx listed parent company completes the purchase of the remaining outstanding shares of the subsidiary pursuant to its undertaking and purchase plan, it shall report to the TPEX in writing for recordation, attaching its report on the implementation of its purchase plan and related supporting documents.
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| Article 8 |
These Operation Directions, and any amendments hereto, shall be publicly announced and enter into force following approval and recordation by the competent authority.
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