Chapter IV Filing for Registration to Issue or Reopen ETNs and Applying for Letters of Approval for TPEx Listing
Article 8 |
To file for registration to issue or reopen an ETN for TPEx listing, a securities firm shall submit a completed Application for Letter of Approval for TPEx Listing of Exchange-Traded Note (Attachment 2) and a completed Securities Firm Registration Statement for Issuance/Reopening of Exchange-Traded Note furnishing all required particulars, together with other required documents, to the TPEx for review, to be conducted in accordance with the ETN Issuance Regulations, these Rules, the TPEx Procedures for the Review of Exchange-Traded Notes, and other applicable TPEx rules. If the result of review shows that the securities firm satisfies the required conditions, the TPEx will issue a letter of approval for TPEx listing together with its review opinion, and then forward the above documents to the competent authority.
When a securities firm files for registration to issue or reopen an ETN, if during the period from the balance sheet date of the most recent financial report submitted by it until the effective registration of the ETN, an event occurs that has a material effect on shareholders' rights or interests (shareholders' equity) or securities prices as contemplated in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act, or its financial or business status undergoes a material change or there is a change in the content of its registration documents that has a material effect on the issuance plan, the securities firm shall obtain a professional opinion from an appropriate expert, as dictated by the nature of the event, and request its attesting CPA to provide an opinion regarding the effect of the event on the current issuance plan, and report all the opinions in writing to the TPEx. The TPEx will then provide an opinion on the matter and submit a written report to the competent authority.
The Procedures for the Review of Exchange-Traded Notes referred to in paragraph 1 shall be separately adopted by the TPEx.
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Article 9 |
A securities firm filing for registration to issue or reopen an ETN shall submit an issuance plan furnishing the following particulars:
- ETN name.
- Issue date.
- Issuance period, with an indication of the maturity date.
- Number of units to be issued under the effective registration. In the case of a reopening, the numbers of units of the previous issue and each of the previous and the current reopenings shall be indicated.
- Issue price, with an indication of the unit price, minimum trading unit, and other relevant information.
- Description of the underlying index, including methods for index construction and calculation. If the underlying index being prepared is a price index, the issuance plan must specify how dividends will be distributed or how indicative value will be adjusted for the ETN when dividends are paid on its component securities.
- Dates and methods for repayment at maturity and interim distribution of dividends. Information about repayment at maturity shall include the method and timing for the repayment and the procedures for delisting from the TPEx, together with statements that the repayment amount is calculated based on the closing indicative value published after market close on the last trading day, that the last trading day is the 2nd business day before the maturity date, that the TPEx delisting date is the next business day following the maturity date, and other relevant information.
- Description of investor fees, including the securities firm's handling fee items and how they are calculated and charged.
- Methods of calculating the intraday indicative value and the (closing) indicative value.
- Issuance method, with an indication of whether a securities underwriter is engaged to underwrite the ETN or the securities firm sells the ETN by itself. If underwriting is involved, the underwriting method shall be specified.
- Market of listing.
- Use of the funds.
- Hedging strategies.
- Risk management measures.
- Risks for investors.
- How and by what procedures investors can subscribe and redeem the ETN or trade the ETN on the given securities exchange market. This item shall at least contain a statement that the redemption price is the closing indicative value published after market close on the redemption request date and specify the minimum redemption unit, the timing of payment for and delivery of ETN units, and other relevant information.
- Conditions and method of notification for the securities firm's early redemption (or compulsory redemption), halting or resumption of subscriptions, and suspension of subscriptions. This item shall contain statements that the last trading day is the next business day following the day the conditions for early redemption (or compulsory redemption) are satisfied and that the repayment amount is calculated based on the redemption price equal to the closing indicative value published after market close on the last trading day. It shall also specify the timing of repayment and other relevant information.
- Procedures to be followed and matters to be handled if the effective registration of the ETN is voided or revoked by the competent authority or the ETN is delisted from the TPEx. This item shall specify the conditions for delisting from the TPEx and contain statements that the last trading day is the next business day following the day the conditions for delisting from the TPEx are met and that the repayment amount is calculated based on the closing indicative value published after market close on the last trading day. It shall also contain a statement that if the index provider discontinues the calculation or publication of the level of the underlying index or terminates the index license agreement, the securities firm shall immediately propose and submit a written repayment plan to the TPEx, and specify other relevant information.
- List of securities underwriters (if any) and liquidity providers and their obligations and duties.
- The ETN is issued and delivered by book-entry transfer without printing physical securities, pursuant to Article 8 of the Securities and Exchange Act.
- Other required particulars.
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Article 10 |
A securities firm filing for registration to issue an ETN and applying for a letter of approval for TPEx listing shall meet the following conditions:
- The securities firm meets the qualifying requirements listed in Article 4 of the ETN Issuance Regulations.
- The aggregate of the total amount of the ETN under the filing for issuance registration plus the total amount of any ETNs already issued under previous effective registrations does not exceed 50 percent of the securities firm's net worth as shown on its most recent CPA audited and attested financial report.
- The total amount of the ETN under the filing for issuance registration is NT$200 million or more, and the number of units to be issued is 5 million units or more.
- The scheduled TPEx listing period for the ETN is not less than 1 year and not more than 20 years.
A securities firm filing for registration to reopen an ETN and applying for a letter of approval for TPEx listing shall meet the following conditions:
- The securities firm meets the qualifying requirements listed in Article 4 of the ETN Issuance Regulations.
- The aggregate of the total amount of the ETN under the filing for reopening registration and the total amount of any ETNs already issued under previous effective registrations does not exceed 50 percent of the securities firm's net worth as shown on its most recent CPA audited and attested financial report. However, this restriction does not apply to a reopening of an ETN for which the securities firm has allocated a supplementary amount of performance bond.
- For the 5 business days preceding the registration date, the average ratio of the number of units already issued to the number of units to be issued under the original effective registration is 80 percent or higher.
- The number of units under the filing for reopening registration is 1 million units or more.
The performance bond referred to in subparagraph 2 of the preceding paragraph shall be deposited in accordance with the Rules Governing Performance Bonds for Issuance and Reopening of Exchange-Traded Notes by Securities Firms jointly adopted by the TPEx and the TWSE.
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Article 11 |
When a securities firm files for registration to issue or reopen an ETN, the TPEx may decline to issue a letter of approval for TPEx listing if any circumstance in the following subparagraphs exists:
- Any of the circumstances listed in Article 8 of the ETN Issuance Regulations.
- The filed registration documents are not submitted in full or do not furnish all the required particulars, and the securities firm fails to supplement those documents by the deadline prescribed by the TPEx.
- Particulars of the filing do not comply with laws or regulations, or there is any misrepresentation or nondisclosure.
- Under the circumstance set out in Article 26 or any other applicable circumstances, the TPEx has imposed a sanction specifying a period during which the TPEx would reject the securities firm's application for a letter of approval for TPEx listing of ETN, and the rejection period has not elapsed.
- There exists any other circumstance under which the TPEx deems listing of the ETN to be unsuitable.
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Article 12 |
A securities firm that has effectively registered with the competent authority to issue or reopen an ETN may contract with a securities underwriter to underwrite the ETN, or it may sell the ETN by itself. The securities firm shall prepare a prospectus and a simplified prospectus and deliver copies of the prospectuses to the securities underwriter and investors and publicly announce their content. However, the securities firm is not required to deliver such prospectuses to investors who purchase the ETN on the securities exchange market.
To make a change to an ETN prospectus or simplified prospectus that involves any matter specified in Article 15, paragraphs 2 or 3 of the ETN Issuance Regulations and that materially affects investors' rights or interests, the issuer shall report the change to the competent authority for approval and shall publicly announce the content of the change on the Internet information reporting system designated by the TPEx within 2 days counting inclusively from the day it receives the letter of approval from the competent authority.
The model templates for the prospectus and simplified prospectus referred to in paragraph 1 shall be jointly adopted by the TPEx and the TWSE and enter into force after approval by the competent authority.
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Article 13 |
A securities firm issuing ETNs shall deposit or maintain a sufficient amount of performance bond by the 10th day of each month, based on the balance of the ETNs outstanding as of the end of the preceding month.
The performance bond referred to in the preceding paragraph shall be deposited in accordance with the Rules Governing Performance Bonds for Issuance and Reopening of Exchange-Traded Notes by Securities Firms jointly adopted by the TPEx and the TWSE.
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