| Article 1 |
These Supplemental Directions shall apply only when an investment holding company applies for listing of its stock on the Taipei Exchange (TPEx) as a professional investment company with the purpose of controlling the business operations of other companies.
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| Article 2 |
The term "held company" as used in these Supplemental Directions means any of the following companies:
- An invested company of which an investment holding company directly holds more than 50 percent of the issued voting shares or has made a capital contribution of more then 50 percent;
- An invested company of which an investment holding company indirectly through its subsidiary holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent; or
- An invested company of which an investment holding company directly, and indirectly through its subsidiaries, holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
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| Article 3 |
An investment holding company applying for TPEx listing of its stock shall meet the following requirements:
- Has been incorporated and registered under the Company Act for 2 complete fiscal years, or any of its held companies has been in actual operation for over 2 complete fiscal years.
- Financially, it shall be required to meet one of the following standards:
- The "profitability" standard: according to the CPA audited and attested financial reports, its ratio of net income before tax to share capital meets one of the following conditions, and its net income before tax in the most recent fiscal year may not be less than NT$4 million:
- 4 percent or more, and no accumulated deficit in the final accounting, for the most recent fiscal year.
- 3 percent or more in each of the last 2 fiscal years.
- An average of 3 percent or more in the last 2 fiscal years and the profitability of the most recent fiscal year is better than that of the previous fiscal year.
- The "net worth, operating revenue, and cash flow from operating activities" standard, simultaneously meeting all of the following conditions:
- Net worth stated in the most recent CPA audited and attested or reviewed financial report is NT$600 million or more and not less than two-thirds of the share capital.
- Operating revenue from principal business in the most recent fiscal year is NT$2 billion or more, and is more than that of the previous fiscal year.
- Cash flow from operating activities in the most recent fiscal year is net inflow.
- Has at least 300 registered shareholders that are not insiders of the company nor juristic persons in which such insiders have a shareholding of 50 percent or more, and whose combined shareholdings account for 20 percent or more of the total issued shares, or more than 10 million shares, of the applicant company.
- Does not engage in businesses other than investment.
- Holds two or more non-professional investment companies that hold no shares in it. The same shall not apply, however, if the held company is required to be a professional investment company because the applicant company has invested via a third location, and under the condition that the applicant company undertakes to incorporate into its financial report all of the held companies under its direct and indirect control.
- Seventy percent of the operating income as reported in its financial report shall come from the held companies of which the applicant company holds more than 50 percent of the issued and outstanding voting shares or has made a capital contribution of more then 50 percent.
- Its investment in the held companies referred to in the preceding subparagraph, as reported in its account books, shall equal 50 percent or more of its investments accounted for using the equity method and equity stated in the parent company only financial report.
- The net worth shown in its financial report for the most recent period equals NT$300 million or more and accounts for one-third or more of its total assets.
- Has not entered into a credit transaction with any non-financial institution.
- Is recommended in writing by two or more securities firms. However, one of those securities firms must be designated as the lead recommending securities firm, while the others shall be co-recommending securities firms.
- Shall engage a professional shareholder services agent to handle shareholder services. A TPEx listed company that becomes listed at any time from 2 January 2013 onward shall engage a professional shareholder services agent to process shareholder services matters, and may not take those matters back into its own hands.
- If the industrial classification of the TPEx listing is the food industry, or its revenue from food and beverages accounts for 50 percent or more of its total operating revenue for the most recent accounting year, the company shall meet the requirements in all the following items:
- At least one of the held companies shall have set up a laboratory to conduct autonomous inspections.
- If product raw materials, semi-finished products, or finished products are to be outsourced for inspection, they shall be submitted to a laboratory or inspection institution certified or recognized by the Ministry of Health and Welfare, by the Taiwan Accreditation Foundation, or by an institution retained by the Ministry of Health and Welfare for the inspection.
- It shall retain independent experts to issue opinions on the reasonableness with respect to the held company's food safety monitoring plan, inspection frequencies, and items to be inspected.
Where the central government authority in charge of the relevant industry has issued an assessment opinion certifying that a company held by an investment holding company is a technology-based enterprise or cultural or creative enterprise and has marketability (hereinafter referred to as "technology-based enterprise or cultural or creative enterprise"), and the requirement is met that 50 percent or more of the consolidated operating revenue of the investment holding company in the most recent fiscal year was contributed by the held company that has obtained the opinion that it is a technology-based enterprise or cultural or creative enterprise, the investment holding company may be exempted from the restrictions under subparagraphs 1 and 2 of paragraph 1. But for an investment holding company that holds a technology-based enterprise, the net worth shall not be less than two-thirds of the share capital stock shown in the latest CPA-audited and attested or reviewed financial report.
For the professional shareholder services agent referred to in paragraph 1, subparagraph 11, it is necessary that the Taiwan Depository and Clearing Corporation issue the following documentation:
- All of the unit's personnel and equipment involved in the handling of stock affairs meet the requirements set forth in the Regulations Governing Handling of Stock Affairs by Public Companies.
- The unit has not in any instance failed to make improvements by a deadline after being audited by the Taiwan Depository and Clearing Corporation and given written recommendations for improvement.
The terms "net worth" and "net income before tax" in this article mean the amount attributable to the owners of the parent.
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| Article 4 |
When carrying out assessment and auditing procedures for an investment holding company's application for TPEx listing of its stock, a recommending securities firm shall, in addition to complying with the Taipei Exchange Directions Governing Assessment and Auditing Procedures for Recommending Securities Firms Handling Applications for Listing of Stock on the TPEx, conduct assessment in accordance with the aforementioned provisions for each individual subsidiary based upon the nature of its business, and submit audit opinions for each, by which further to present overall opinions.
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| Article 5 |
Any of the events in Article 10, paragraph 1, subparagraphs 1, 3, 4, 6, 7, or 12 of the Taipei Exchange Rules Governing the Review of Securities for Trading on the TPEx applies to any company held by an investment holding company, and the TPEx deems it unsuited for TPEx listing, the TPEx may disapprove the investment holding company's application for TPEx listing of its stock.
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| Article 6 |
(Deleted)
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| Article 7 |
Except as otherwise provided for the specific enterprises listed below, the personnel required to place their shares in an investment holding company in centralized custody means the directors and shareholders holding more than 10 percent of the total amount of issued shares of the investment holding company:
- In the case of an investment holding company that holds a technology-based enterprise under Article 3, paragraph 2, it means the directors, general manager, R&D directors, shareholders holding more than 5 percent of the total amount of issued shares, and those shareholders providing patent rights or technical know-how as capital contribution and serving in a position in the investment holding company or its held company and furthermore holding not less than 0.5 percent of the total amount of issued shares or 100,000 or more shares of the company at the time of application for trading on the TPEx.
- In the case of an investment holding company that holds a cultural or creative enterprise under Article 3, paragraph 2, it means the directors, shareholders holding more than 5 percent of the total amount of issued shares, and those shareholders providing patent rights or technical know-how as capital contribution and holding a position in the investment holding company or its held company and furthermore holding not less than 0.5 percent of the total issued shares or 100,000 or more shares of the company.
Persons required to place their shares in centralized custody under the preceding paragraph shall conduct matters related to the placement of shares in centralized custody and withdrawal of shares upon expiration of custody in accordance with Article 3, paragraph 1, subparagraph 4, of the Taipei Exchange Rules Governing the Review of Securities for Trading on the TPEx; provided, this provision shall not apply where during the emerging stock registration period of an investment holding company that holds a technology enterprise or cultural or creative enterprise, its recommending securities firms hold more than 5 percent of its total outstanding shares as a result of subscription or trading of operating securities.
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| Article 8 |
If a TPEx listed or TWSE listed investment holding company holds more than 70 percent of the shares of a held company, and the held company applies for TPEx listing of its stock, the investment holding company shall cause its shareholding to fall to 70 percent or less before the TPEx listing.
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| Article 9 |
These Supplemental Directions, and any amendments hereto, shall take effect after the board of directors of the Taipei Exchange has voted its approval and filed them with the competent authority for review and recordation.
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