| Article 1 |
These Rules are prescribed in accordance with Article 8 of the Regulations Governing Securities Trading on the Taipei Exchange (the "Trading Regulations").
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| Article 2 |
Except for government-issued bonds or other securities designated by the Financial Supervisory Commission (the "Competent Authority") in accordance with Article 5, paragraph 1 of the Trading Regulations, trading of securities on the Taipei Exchange (TPEx) shall be applied for by issuers with the TPEx, and shall be examined by the TPEx in accordance with these Rules and the operation procedures for examination of offering of securities to the TPEx.
The operation procedures for examination of offering of securities to the TPEx referred to in the preceding paragraph shall be separately prescribed by the TPEx.
The term "financial reports" as used in these Rules means consolidated financial reports, or if the issuer does not have a subsidiary, means individual financial reports.
The term "related party" as used in these Rules is defined in accordance with Article 18 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers. However, if regulations that the competent authority has issued to govern the preparation of financial reports by enterprises in other specific industries provide otherwise, those provisions shall govern.
The term "insider" as used in these Rules means any director, supervisor, or managerial officer, or shareholder holding more than 10 percent of the total shares, of the company. The calculation of shares held by any such persons shall include those held by their spouses and minor children and those held under the names of other persons.
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| Article 3 |
A public issuer applying for trading of stocks on the TPEx shall meet the following requirements:
- Its paid-in capital shall be not less than NT$50 million and the number of its offered and issued common shares shall be not less than 5 million shares, determined based on the amount of capital shown on the certifying documents following registration (or amendment of registration). However shares of privately placed securities that have not been publicly issued shall not be counted in the calculation of the aforesaid amount of capital.
- It shall have been incorporated and registered under the Company Act for no less than 2 full fiscal years, and financially 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.
- Its number of registered shareholders, excluding company insiders and any juristic person in which such insiders hold more than 50 percent of the shares, shall not be less than 300; the total amount of the combined shareholdings of such registered shareholders shall constitute 20 percent or more of the total issued shares, or more than 10 million shares.
- Personnel required to place their company shares in central custody shall carry out matters relating to placement in central custody and withdrawal from custody upon expiration for the entire amount of their shareholding in accordance with the applicable TPEx regulations. The applicable regulations concerning placement in central custody and withdrawal from custody upon expiration shall be separately prescribed by the TPEx.
- It is recommended in writing by two or more securities firms, provided that one of them shall be designated as the lead recommending securities firm, and the other(s) as assisting recommending securities firm(s).
- It shall engage a professional shareholder services agent to handle shareholder services. A TPEx listed company that was listed at any time from 2 January 2013 onward shall engage a professional shareholder services agent to handle shareholder services, and may not take those services back into its own hands.
- Its stock shall have been registered for trading on the Emerging Stock Market (ESM) for not less than 6 months. During the period of the issuer's ESM registration, if the lead advisory recommending securities firm is changed, the issuer shall undergo guidance by the newly appointed lead advisory recommending securities firm, and then be traded for a further period of not less than 6 months on the ESM before it may submit an application for TPEx listing.
- The stocks and bonds publicly offered and issued or privately placed by it shall all have been issued in scripless form without exception.
- A remuneration committee shall be established pursuant to Article 14-6 of the Securities and Exchange Act and its relevant regulations.
- A company shall in its articles of incorporation specify the following matters:
- Electronic transmission shall be listed as one of the methods for exercising shareholder voting rights.
- The candidate nomination system shall be adopted for the election of directors.
- An audit committee shall be established.
- If the industrial classification of the TPEx listing is the food industry, or 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:
- It 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 its food safety monitoring plan, inspection frequencies, and items to be inspected.
- It shall have appointed a chief corporate governance officer in accordance with the TPEx Directions for Compliance Requirements for the Appointment and Exercise of Powers of the Boards of Directors of TPEx Listed Companies.
A state-owned enterprise applying for trading of its stocks on the TPEx shall not be subject to the restrictions under subparagraphs 2 to 4 of the preceding paragraph; a privatized state-owned enterprise shall not be subject to the restriction on duration of incorporation in subparagraph 2 of the preceding paragraph. If a credit cooperative reorganizes itself into a commercial bank, the calculation of duration of incorporation under subparagraph 2 of the preceding paragraph may include the period of the credit cooperative's establishment under the Credit Cooperative Act.
A securities enterprise, futures enterprise, financial enterprise, or insurance enterprise which applies for trading of its stocks on the TPEx shall obtain an approval letter from the authority in charge of said enterprises before the TPEx shall accept the application. Furthermore, directors, and shareholders holding more than 5 percent of the total shares, of a securities investment trust enterprise shall carry out matters relating to placement of their shares in central custody and withdrawal from custody upon expiration in accordance with subparagraph 4 of paragraph 1 above.
A public issuer which obtains a clear written assessment and opinion issued by central competent authority for the target industry to the effect that such issuer is a technology-based enterprise or cultural or creative enterprise and has marketability ("a technology-based enterprise or cultural or creative enterprise"), shall not be subject to the restriction under subparagraph 2 of paragraph 1 if it meets the following requirements, provided that a technology-based enterprise's net worth shall not be less than two-thirds of the share capital stated in the latest CPA-audited and attested or reviewed financial report. A technology-based enterprise or cultural or creative enterprise shall carry out matters including the placement of shares in central custody and withdrawal from custody upon expiration of the custody period in accordance with the relevant regulations of the TPEx.
For a company whose stock has been listed for trading on the Taiwan Innovation Board (TIB) of the Taiwan Stock Exchange Corporation (TWSE) for not less than 2 years pursuant to Chapter IV of the TWSE Rules Governing Review of Securities Listings, when the company applies for TPEx trading of its stock, it shall satisfy the conditions set out in the subparagraphs of paragraph 1, except that the financial requirement in paragraph 1, subparagraph 2 only refers to meeting the "profitability" standard set out in item A and that the company need not be subject to the restriction of paragraph 1, subparagraph 7.
Documents shall be issued by the Taiwan Depository & Clearing Corporation (TDCC) certifying the following matters for the professional shareholder services agent referred to in subparagraph 6 of paragraph 1:
- That its personnel and facilities for handling shareholder services all comply with the Regulations Governing the Administration of Shareholder Services of Public Companies.
- That it has not within the past 3 fiscal years, following an audit by the TDCC, been given written notice of recommendations for improvements and failed to make improvements within the deadline.
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 3-1 |
A public issuer meeting one of the following conditions and without any of the conditions under Article 13 and Article 13-1 of the Taipei Exchange Rules Governing Securities Trading on the TPEx (the "Trading Rules") may, with the written recommendation of two or more securities firms, apply to the TPEx for inclusion of its stocks as TPEx managed stocks.
- Where trading of the stocks on the TPEx is terminated pursuant to Article 12-2 of the Trading Rules; or
- Where the issuer is a TWSE listed company whose securities are delisted pursuant to Article 50-1 of the Operating Rules of the Taiwan Stock Exchange Corporation.
Those who apply for including their stocks as TPEx managed stocks pursuant to the provisions in the preceding paragraph shall file an application to the TPEx within 1 month from the date of public announcement of the termination.
Those who apply for including their stocks as TPEx managed stocks pursuant to the provisions in paragraph 1 above shall engage a professional shareholder services agent to handle shareholder services, shall be recommended in writing by two or more securities firms, and shall not be subject to the restrictions of Article 3, Article 4, and Article 10 herein.
A securities enterprise, futures enterprise, financial institution, or insurance enterprise that applies for its shares to become TPEx-managed stocks shall first obtain an approval letter from the competent authority of the target industry before the TPEx may accept and process its application.
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| Article 3-2 |
A trustee institution applying to the TPEx for trading of beneficial securities issued by a closed-end real estate investment trust fund offered by the trustee institution in accordance with the Real Estate Securitization Act shall meet all of the following conditions:
- The total issue amount is NT$2 billion or more.
- The duration of the contract must be 1 year or more from the date of commencement of TPEx trading.
- The number of beneficiaries holding a total amount of NT$1 million or less of the beneficial units shall not be less than 300, and the total amount of all beneficial units held by such beneficiaries shall not be less than NT$200 million.
- The total price amount of the beneficial units held by any five beneficiaries shall not exceed 50 percent of the total issue amount of the beneficial securities. Provided, this restriction shall not apply where the holder is an independent institutional investor.
- The owner of the real estate or rights owner of rights related to the real estate invested in by the fund, in accordance with Article 8, paragraph 4 of the Regulations Governing the Offering or Private Placement of Real Estate Investment Trust or Real Estate Asset Trust Beneficial Securities by Trustee Institutions, shall place in full the beneficial securities of the fund that it holds from the assignment of the real estate or real estate related rights in central custody with the TDCC, and shall undertake that it shall not sell the securities within 1 year from the date the fund is established, that the certificates of central custody of the securities shall not be transferred, nor placed under pledge, nor may those beneficial securities be used as collateral to engage in repo transactions, and that the beneficial securities in central custody shall not be withdrawn until after the 1-year period has elapsed.
- Each beneficial security shall represent 1,000 beneficial units, and have a par value limited to NT$10,000.
The term "independent institutional investor" in the preceding paragraph means a juristic person or institution under Article 13, paragraph 1, subparagraph 1 of the Real Estate Securitization Act or a fund under Article 13, paragraph 1, subparagraph 2 of the same Act; and does not mean a promoter of a real estate investment trust, or an interested party thereof, or an affiliated enterprise as referred to in the Company Act, or a related party as defined under Article 2, paragraph 4.
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| Article 3-3 |
A public issuer may apply to the TPEx for trading on the TPEx of exchangeable corporate bonds issued by it only where the underlying is a single stock.
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| Article 3-4 |
When an issuer applies, or files for registration, for TPEx trading of a specific bond having a benchmark nature, it shall engage at least one other securities dealer to continuously provide trading quotes on business days during a specific period through the price quotation system designated by the TPEx.
A specific bond having a benchmark nature as referred to in the preceding paragraph shall meet the following conditions:
- A single-maturity straight corporate bond or financial bond with an issue par value of not less than NT$5 billion.
- The rating of the bond, the long-term credit rating of the issuer, or the long-term credit rating of the bond's guarantor institution ranks "twAA" from the Taiwan Ratings Corporation or an equivalent or higher rating from a credit rating institution approved or recognized by the competent authority.
- The specific bond is neither a subordinated straight corporate bond nor a subordinated financial bond.
"Specific period”" in paragraph 1 means a period of at least 3 months from the date of TPEx listing of the specific bond having a benchmark nature.
The term "quotes" in paragraph 1 means two-way buy and sell reference quotes made at the securities firm's place of business. However, for bonds that the securities firm making the quotes does not hold, it need only quote buy prices.
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| Article 4 |
A public issuer applying for initial offering of stocks for trading on the TPEx shall allocate a specified percentage of the total shares it intends for TPEx listing and retain the recommending securities firms referred to in Article 3, paragraph 1, subparagraph 5 to underwrite the shares in full by means of a cash capital increase through a new share issue. Provided, that a state-owned enterprise or a private institution participating in public construction may carry out underwriting with stock already publicly offered and issued by the company.
In addition to allocating a certain portion of shares and retaining the recommending securities firms to underwrite them in accordance with the preceding paragraph, the public issuer may also use shares already offered and issued by the company as a greenshoe (over-allotment) for stabilization of the underwriting price by the recommending securities firms; this portion also constitutes a portion of that which the recommending securities firms are retained to underwrite.
The percentage referred to in paragraph 1 shall be separately prescribed by the TPEx.
After deducting the number of shares that it must retain to offer for purchase by company employees in accordance with applicable acts and regulations, the issuer shall offer for sale to the public, prior to the TPEx listing, all of the shares in the new share issue by cash capital increase referred to in paragraph 1.
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| Article 5 |
A public issuer applying for trading of its stocks on the TPEx shall submit to the TPEx an Application for Trading Stocks on the TPEx (Schedule 1), stating the required particulars, together with the required documents.
A public issuer may apply to the TPEx for trading on the TPEx of only its common stock or preferred stocks issued by it. The number of registered shareholders for shareholding dispersal purposes and the ratio of their shareholding to the total issued shares shall be calculated respectively based on the class of shares to be traded on the TPEx.
Where a public issuer applies for trading on the TPEx of its common stock as well as any class(es) of its preferred stock, the common stock and each class of preferred stock applied for trading on the TPEx shall each respectively have a total issued amount of not less than NT$50 million and furthermore an issued quantity of not less than 5 million shares, and each class of such stocks shall moreover meet the shareholding dispersal requirement.
A public issuer applying for including its stocks as managed stock pursuant to Article 3-1 shall submit to the TPEx an Application for Trading Managed Stocks on the TPEx (Schedule 2), stating the required particulars and annexing the required documents.
A trustee institution applying for trading on the TPEx of its issued beneficial interest certificates in accordance with the requirements specified in Article 3-2 shall submit to the TPEx an Application for Trading of Beneficial Securities on the TPEx (Schedule 2-1), stating the required particulars and annexing the require documents.
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| Article 6 |
A public issuer applying for the first time to trade its straight corporate bonds, convertible corporate bonds, exchangeable corporate bonds, or corporate bonds with warrants (including corporate bonds for which the warrants have been detached) on the TPEx shall, no later than 5 business days prior to the commencement of TPEx trading, submit to the TPEx an Application for Trading of Corporate Bonds, Convertible Corporate Bonds, Exchangeable Corporate Bonds, or Corporate Bonds with Warrants on the TPEx (Schedules 3, 3-1, 3-2, 3-3, 3-4, 3-5, 3-6, 3-7, and 3-8), stating the required particulars and annexing the required documents. However, for straight corporate bonds that are sold only to professional investors as defined under the TPEx Rules Governing Management of Foreign Currency Denominated International Bonds, and where the relevant securities underwriters publish the underwriting announcement on the website of the securities dealers association, the aforementioned deadline for application may be adjusted to no later than 4 business days prior to the commencement of TPEx trading.
A public issuer that applies to trade straight corporate bonds on the TPEx must meet the following conditions, and in addition, must provide a credit rating report on the bonds from a credit rating agency approved or recognized by the competent authority:
- The bonds must be guaranteed by an ROC financial institution.
- The issuer must have provided a credit rating report on the issuer from a credit rating agency approved or recognized by the competent authority.
- The bonds are restricted for sale only to professional investors.
The term "professional investor" under the preceding paragraph shall be subject to the provisions of Article 2-1, paragraph 1 of the TPEx Rules Governing Management of Foreign Currency Denominated International Bonds.
The verification of the qualifications of professional investors and the signing of a risk disclosure statement shall be carried out pursuant to Article 2-1, paragraphs 2 to 4 of the TPEx Rules Governing Management of Foreign Currency Denominated International Bonds.
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| Article 6-1 |
Where the following conditions are met, an issuer of convertible corporate bonds, exchangeable corporate bonds, or corporate bonds with warrants that are already listed on the central exchange market may apply to the TPEx for the trading of such bonds on the TPEx:
- Submit the Announcement of Delisting by the TWSE for the said convertible corporate bonds, exchangeable corporate bonds, or corporate bonds with warrants.
- The issuer shall be free of any of the conditions specified in Article 12-1 and Article 12-2, subparagraphs 2 through 16 of the Trading Rules.
Application, in accordance with preceding provisions, for the said convertible corporate bonds, exchangeable corporate bonds, or corporate bonds with warrants to be traded on the TPEx shall be submitted to the TPEx within 5 days upon publication of the Announcement of Delisting by the TWSE.
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| Article 7 |
A financial institution that applies to trade its financial bonds on the TPEx shall submit to the TPEx an Application for Trading of Financial Bonds on the TPEx (Schedule 4), stating the required particulars and annexing the required documents, except that where such financial bonds have attached conversion, exchange, or subscription rights, the relevant provisions regarding convertible corporate bonds, exchangeable corporate bonds, or corporate bonds with warrants shall apply mutatis mutandis.
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| Article 7-1 |
Beneficial securities or asset-backed securities issued under the Financial Assets Securitization Act (hereinafter, "beneficial securities" or "asset-backed securities") for which the issuing institution is applying to the TPEx for trading on the TPEx shall meet the following conditions:
- Be beneficial securities or asset-backed securities issued through effective registration or application and approval from the competent authority for the Financial Assets Securitization Act.
- Have set out specific definitions and calculation standards for the repayment amounts, duration, interest, and interest payment.
- The maturity date shall be not less than 1 year from the date of listing with the TPEx.
- Issue size shall be not less than NT$500 million.
- The number of beneficiaries or holders is not less than five persons, and the total amount of any individual holdings of such beneficial securities or asset-backed securities shall not exceed 20 percent of the total issue amount; if the holder is an independent institutional investor, the restriction of 20 percent of the total issue amount shall not apply.
The term "independent institutional investor" in the preceding paragraph means a juristic person or institution under Article 13, paragraph 1, subparagraph 1 of the Real Estate Securitization Act or a fund under Article 13, paragraph 1, subparagraph 2 of the same Act; and does not mean an originator as referred to in the Financial Asset Securitization Act, or an interested party thereof, or an affiliated enterprise as referred to in the Company Act, or a related party as defined under Article 2, paragraph 1.
When applying for trading of its beneficial securities or asset-backed securities on the TPEx, an issuer shall submit the Application for Trading on the TPEx (Schedules 4-1, 4-2) to the TPEx and fill in the statement of particulars, together with required documents.
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| Article 7-2 |
Real estate asset trust beneficial securities issued under the Real Estate Securitization Act for which the issuing institution is applying for trading on the TPEx shall meet all the following conditions:
- Issue size shall be not less than NT$500 million.
- The maturity date shall be not less than 1 year from the date of commencement of TPEx trading.
- Have set out specific definitions and calculation standards for the repayment amounts, duration, interest, and interest payment.
- The number of beneficiaries shall be no less than five, and furthermore the total amount of the first-payment-priority beneficial securities held by any five beneficiaries shall not exceed 50 percent of the total issue amount of the beneficial securities; if the holder is an independent institutional investor, the restriction of 20 percent of the total issue amount shall not apply.
- The beneficial securities shall undergo rating by a credit rating institution approved by the competent authority for the relevant industry.
The term "independent institutional investor" in the preceding paragraph means a juristic person or institution under Article 13, paragraph 1, subparagraph 1 of the Real Estate Securitization Act or a fund under Article 13, paragraph 1, subparagraph 2 of the same Act; and does not mean a promoter of a real estate investment trust, or an interested party thereof, or an affiliated enterprise as referred to in the Company Act, or a related party as defined under Article 2, paragraph 4.
A trustee institution applying for trading of its issued beneficial securities on the TPEx shall submit the Application for Trading of Beneficial Securities on the TPEx (Schedules 4-3, 4-4) to the TPEx, specifying the required particulars and annexing the required documents.
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| Article 8 |
The preceding three Articles shall apply mutatis mutandis to applications to TPEx for trading other securities on the TPEx.
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| Article 9 |
The securities firms recommending stocks for trading on the TPEx referred to in Article 3, paragraph 1, subparagraph 5 shall be qualified securities underwriters and TPEx securities dealers; provided that those who recommend the stocks of a securities firm shall be qualified securities underwriter only.
The securities firms recommending stocks for trading on the TPEx, except for those recommending the stocks of state-owned enterprises and securities firms, shall meet the requirements under Article 23 of the Regulations Governing Securities Firms.
In the event that a public issuer or the recommending securities firm has any of the following conditions, TPEx shall refuse the assessment report issued by such recommending securities firm and shall not approve the trading of such stocks on the TPEx:
- Where the issuer and recommending securities firm make assessment related to the initial trading on the TPEx or initial listing on behalf of each other;
- Where there exists any condition listed under Article 26 of the Regulations Governing Securities Firms; or
- Where the issuer and recommending securities firm are from the same corporate group.
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| Article 10 |
In the event that a public issuer meets the requirements/ conditions under these Rules but is deemed by the TPEx unsuitable to have its stocks traded on the TPEx due to any of the following conditions, in addition to the mandatory denial of approval for trading of stocks on the TPEx in case any of the conditions enumerated in subparagraphs 7 to 9 occurs, the TPEx may deny approval for the trading of stocks on the TPEx:
- Where the public issuer has any of the conditions provided in Article 156, paragraph 1, subparagraphs 1 to 3 of the Securities and Exchange Act;
- Where the finance or business cannot be independent of those of others;
- Where significant labor dispute or environmental pollution occurred and no improvement has been made;
- Where significant abnormal transaction occurred and no improvement has been made as of the time of application;
- Where after consolidating the new shares from capital increase already issued or being issued in the fiscal year of application for trading stocks on the TPEx into the share capital stated on the financial report for the most recent year, the profitability does not meet the requirements for trading stocks on the TPEx;
- Where financial reports are not prepared in accordance with relevant laws and regulations and generally accepted accounting principles, or to a serious extent the internal control, internal auditing, and written accounting system are not soundly established and effectively executed;
- Where the company or any director, general manager, or actual responsible person at the time of application has committed any act in violation of the principle of honesty and good faith in the last 3 years;
- Where the applicant company has less than five directors on its board of directors or its directors are of a single gender, or its independent directors number less than three persons or less than one-third of the number of directors; or where the board of directors is unable to independently perform its functions.
- Where the applicant company has been registered for TPEx trading of its stock as Emerging Stock in the fiscal year of the application and the most recent fiscal year thereto, and there has been, from the registration date onward, any trading of stock issued by the applicant company by any incumbent director, or shareholder holding more than 10 percent of its total shares, other than on the ESM; provided, this restriction shall not apply where such trading is for purposes of underwriting under Article 4 or for other legitimate reason.
- Where shares of the applicant company are held by a TPEx or TWSE listed company and furthermore any of the conditions listed below is met, and during the 3-year period before the application for TPEx listing, the TPEx or TWSE listed company, when taking any action to disperse its equity ownership in order to reduce its shareholding percentage in the applicant company, has failed to do so in a manner giving pre-emptive subscription rights to the existing shareholders of the TPEx or TWSE listed company or other manner not detrimental to the rights and interests of the shareholders of the TPEx or TWSE listed company:
- The applicant company is a transferee company of a demerger conducted by the TPEx or TWSE listed company.
- The applicant company is a subsidiary of the TPEx or TWSE listed company, and during the 3-year period before the application for TPEx listing, the TPEx or TWSE listed company has cumulatively reduced its shareholding percentage in the applicant company, including direct and indirect shareholding, by 20 percent or more.
- There is serious deterioration in the business it operates.
- Where the TPEx deems TPEx listing of the stock unsuitable due to the scope, nature or special conditions of the enterprise.
If any of the standards regarding major subsidiaries set out in Article 2-1, paragraph 2 of the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants or Article 5 of the Directions for Auditing and Attestation of Financial Statements of Financial Institutions by Certified Public Accountants exists with respect to a subsidiary of a public issuer in the most recent fiscal year or the fiscal year of application, the subsidiary shall, mutatis mutandis, be subject to subparagraphs 1 to 4 and 7 of the preceding paragraph, and if the subsidiary has appointed supervisors, its supervisors shall also, mutatis mutandis, be subject to subparagraph 7.
Subparagraph 2 of paragraph 1 above shall not apply to state-owned enterprises applying for trading stocks on the TPEx.
The termination date of the application period under the subparagraphs of paragraph 1 above shall be the day before the date of the TPEx's issuance of a letter notifying the issuer of its agreement to trading of the relevant stocks on the TPEx.
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| Article 11 |
Where the TPEx considers that a security is suitable for trading on the TPEx upon examination in accordance with these Rules, the issuer shall enter into a contract with the TPEx for trading securities on the TPEx.
After the TPEx agrees to a contract for the trading of stocks on the TPEx, it shall issue a letter notifying the issuer and report the matter to the competent authority for recordation.
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| Article 12 |
An issuer of securities which the competent authority has designated for trading on the TPEx or which the TPEx has agreed to trade on the TPEx shall, after receipt of the TPEx's notice of agreement to the contract referred to in the preceding Article, process the following matters with the TPEx 3 days before trading the securities on the TPEx:
- To decide the date for commencement of the trading on the TPEx;
- To pay fees for trading on the TPEx; and
- To submit prospectus, statement of shareholding dispersal, documentary evidence of registration of scripless issuance, and other necessary documents specified by the TPEx.
The commencement date of trading for securities the TPEx has agreed to trade on the TPEx shall be within 3 months after the issuer has received the TPEx's notice of agreement to the contract referred to in the preceding article. In the event that the trading does not commence within the said period, the TPEx shall cancel the contract for trading of the securities on the TPEx, provided that if an application for extension with justifiable reason is filed with and approved by the TPEx, a 3-month, one-time-only, extension may be granted. Any cancellation of a contract or approval of an extension as set out above shall be filed by the TPEx for recordation with the competent authority.
The commencement date for trading the managed stocks applied for by a public issuer in accordance with the requirements in Article 3-1 shall be the same day on which trading on the TPEx or on the TWSE is terminated. In the event that the trading does not commence on the said date, the TPEx shall cancel the contract for trading of the securities on the TPEx and report the cancellation to the competent authority for recordation.
When a public issuer applies in accordance with Article 6-1 for trading of convertible corporate bonds, exchangeable corporate bonds, or corporate bonds with warrants on the TPEx, the first date for trading of the bonds shall be set for the same as the delisting date of the bonds by the TWSE.
When a public issuer applies to trade straight corporate bonds on the TPEx pursuant to Articles 6 and 15, unless the bonds are a further issue within the prescribed time period under an effective shelf registration or the bonds are issued by a financial holding company with the approval of the competent authority, the issuer shall, within 7 business days after the date of effective registration, proceed pursuant to Article 252 of the Company Act, and complete the offering and issuance and commence TPEx trading.
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| Article 13 |
Before the commencement date of trading, the issuer of the securities traded on the TPEx pursuant to Article 11 shall enter the following information into the Internet information reporting system designated by the TPEx, and submit the information as downloaded from that system to the TPEx for recordation:
- Name of issuer;
- Commencement date of trading on the TPEx;
- Date and reference number of the document evidencing TPEx agreement;
- For stocks, the value per share, date of issuance, number of shares, total amount, and total amount of the accumulated stocks for trading on the TPEx; for bonds, the total issuance amount, par value, series number, date, interest rate, issuance price, period and method for payment of principal and interest; for beneficial securities, the date of issuance, date of maturity, total issuance amount, principal holding percentage, interest holding percentage, repayment sequence and period, and information related to other beneficial rights; for asset-backed securities, the date of issuance, date of maturity, total issuance amount, coupon rate, repayment sequence and period, and information related to other rights and interests; for real estate investment trust or real estate asset trust beneficial securities, the date of issuance, date of maturity, total issuance amount, share of interest in capital, share of interest in income, payment sequence and periods, and information related to other beneficial interests in the real estate; the issue date, duration, total number of units to be issued, multiplier per unit, earliest subscription date, and other related information of the company warrants.
- Other matters to be publicly announced.
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| Article 14 |
Where the bonds issued by the government are traded on the TPEx, the issuer shall submit to the Competent Authority for transmittal to the TPEx for public announcement the information regarding the type of issue, number of amortization, date, interest rate, denomination, period and method for payment of principal and interest, after which trading may be commenced.
For other securities designated by the Competent Authority for trading on the TPEx, the issuer shall submit to the Competent Authority for transmittal to the TPEx for public announcement the information of the issue, after which trading may be commenced.
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| Article 15 |
When an issuer whose stocks are traded on the TPEx re-issues new shares of the same class, or issues certificates of entitlement to new shares, certificates of payment for new shares, or other securities approved by the competent authority, the issuer shall, 2 business days before the new shares are traded on the TPEx, file and upload relevant documents on the TPEx-designated Internet information reporting system, and pay the fees for trading on the TPEx. The new shares shall be traded on the TPEx from the date on which they are delivered to shareholders; provided that if the issuer has any of the conditions under paragraph 1 of Article 156 of the Securities and Exchange Act, the SFC may restrict the trading on the TPEx.
An issuer of convertible corporate bonds or corporate bonds with warrants whose shares are already listed on the central exchange market shall, when issuing new or additional certificates of entitlement to convert bonds into shares or certificates evidencing payment of shares, comply with the procedures regarding public listing of certificates of entitlement to convert bonds into shares or certificates evidencing payment of shares prescribed by the TWSE.
When an issuer whose bonds are already traded on the TPEx re-issues bonds and applies to trade them on the TPEx, it shall, no later than 5 business days prior to the commencement of TPEx trading, report to the TPEx by submitting a Registration Statement for Trading of Straight Corporate Bonds, Convertible Corporate Bonds, Exchangeable Corporate Bonds, Corporate Bonds with Warrants, or Financial Bonds on the TPEx (Schedules 8, 8-1, 8-2, and 9) and relevant documents and pay fees for trading on the TPEx. However, for straight corporate bonds that are sold only to professional investors as defined under the TPEx Rules Governing Management of Foreign Currency Denominated International Bonds, and where the relevant securities underwriters publish the underwriting announcement on the website of the securities dealers association, the aforementioned deadline for application may be adjusted to no later than 4 business days prior to the commencement of TPEx trading.Where no application is made for trading on the TPEx, the issuer shall report to the TPEx within 30 days of the date of issuance with a declaration of the particulars of the issue and related documents (Schedules 10 and 10-1). The issuer may also apply to the TPEx for trading certificates of payment for bonds on the TPEx by submitting an application (Schedule 11).
An issuer whose bonds are already traded on the TPEx may, for its previously issued bonds, register the bonds with the TPEx by submitting to the TPEx a Registration Statement for Trading of Straight Corporate bonds, Convertible Corporate Bonds, Exchangeable Corporate Bonds, Corporate Bonds with Warrants, or Financial Bonds on the TPEx with the relevant documents, and paying the fees for trading on the TPEx. When an issuer whose straight corporate bonds already trade on the TPEx files for TPEx trading of straight corporate bonds, its bond credit rating report may be submitted in accordance with the provisions of Article 6, paragraph 2.
After the TPEx confirms that the documents referred to in preceding paragraphs 1, 3 and 4 have been filed and uploaded in full, it shall make a public announcement of the TPEx trading. The submitted documents under paragraph 1, Registration Statement for Trading of Corporate Bonds on the TPEx, Registration Statement for Trading of Convertible Corporate Bonds on the TPEx, Registration Statement for Trading of Exchangeable Bonds on the TPEx, Registration Statement for Trading of Corporate Bonds with Warrants on the TPEx, Registration Statement for Trading of Financial Bonds on the TPEx, or Application for Trading of Certificates of Payment for Corporate Bonds on the TPEx shall become a part of the original contract for trading securities on the TPEx.
When a public company applies for TPEx trading of its issued stock of a different class from the stock already traded on the TPEx, or of company warrants, it shall apply to the TPEx by submitting the Application for Trading of Securities on the TPEx (Schedule 12), furnishing all required particulars, together with the required documents.
For an application under the preceding paragraph for trading on the TPEx of stock of a different class, where all of the following conditions are furthermore met, the TPEx may approve the TPEx trading of the stock:
- The shares under the application for TPEx trading have a total issued amount of not less than NT$50 million and furthermore a total issued quantity of not less than 5 million shares.
- The issuer has allocated 10 percent or more of the total issued amount for public offering as provided in Article 4.
- The issuer has complied with the shareholding dispersion standards provided in Article 3, paragraph 1, subparagraph 3.
For an application under paragraph 6 for trading on the TPEx of stock warrants, the total amount of stock warrants shall be not less than 5 million units. Only after such issuer has allocated 10 percent or more of the total amount issued for public offering and complied with the shareholding dispersion standards provided below, may the TPEx approve for trading on the TPEx. For preferred shares with detachable warrants, if the preferred shares after detachment of warrants do not meet the requirements for TPEx trading under the preceding paragraph, the company warrants may not be traded on the TPEx, either.
- If the total number of stock warrants is less than 20 million units, there shall be 50 or more holders of stock warrants.
- If the total number of stock warrants is not less than 20 million units, there shall be 100 or more holders of stock warrants.
A public issuer applying for TPEx trading of shares issued by it that are not of the same class of stock as those already traded on the TPEx and that are redeemable for cash upon maturity shall comply with the provisions of paragraphs 6 and 7; however, the shareholding dispersion standards in Article 3, paragraph 1, subparagraph 3 of these Rules shall not apply.
A public issuer shall file and upload relevant documents on the TPEx-designated Internet information reporting system for any subscription of, conversion into, or exchange for stocks of a class already traded on the TPEx through exercise of any preferred shares with warrants, convertible preferred shares, corporate bonds with warrants, convertible corporate bonds, exchangeable corporate bonds, or company warrants offered and issued by it, and may be exempted from the requirement of public offering under Article 4.
Securities that are privately placed by a public company and securities subsequently distributed, converted, or subscribed may not be listed on the TPEx during the period of restriction of transfer as set forth in Article 43-8 of the Securities and Exchange Act. Once the period of restriction of transfer has elapsed, the company may file a TPEx listing application only after first applying to the TPEx for a letter of approval and, on the basis of that letter, completing issuance examination and approval procedures with the Competent Authority. However, it may be exempted from the requirement of carrying out public offering prior to TPEx listing under Article 4.
When applying to the TPEx for issuance of a letter of approval under the preceding paragraph, a TPEx company shall meet the standards in each of the following subparagraphs; the TPEx will reply by letter to the applicant company after it has inspected the application documents submitted for completeness and the administering department has examined them for compliance with requirements:
- The financial reports for the most recent period and the most recent accounting year show an absence of accumulated deficit and a positive net worth.
- Its profitability meets the requirements of Article 3, paragraph 1, subparagraph 2.
- A certified public accountant has audited the financial reports for the most recent 2 accounting years and has signed and issued an audit report containing an unqualified opinion. If an audit report containing other than an unqualified opinion is issued, it does not affect the fairness of presentation of the financial reports.
- None of the events set out in Article 10, paragraph 1, subparagraphs 1, 3, 4, 6, 7, or 12 is present.
- The total amount of registered shares held by the directors and supervisors as a whole is higher than the share ownership ratio prescribed by the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.
- The fund utilization plan has been completely executed for the funds obtained from the private placement of securities, and has yielded reasonable benefits; provided, this restriction shall not apply if there is legitimate reason.
- For an applicant company that had net income after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of net income before tax to year-end share capital for the most recent fiscal year shall be better than that for the fiscal year before the shareholders meeting resolved on the private placement of securities. However, the above-mentioned profitability restriction shall not apply if, because of a change in the business cycle of the industry, the average of the 3 fiscal years before the application is better than that of the fiscal year that, or better than the average of the 3 fiscal years before, the shareholders meeting resolved on the private placement of securities, and the average reaches 4 percent or more:
- The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, the privately placed shares have not been transferred, or have been transferred to the holding of any non-insider(s) or non related party(ies) of the applicant company.
- There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TPEx, and at the time the company applies for the letter of approval for listing of the privately placed securities, the securities have not been transferred, or have been transferred to the holding of any non-insider(s) or non related party(ies) of the applicant company.
- For an applicant company that had net income after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of net income before tax to year-end share capital for the most recent fiscal year may not be lower than 200 percent of that for the fiscal year before the shareholders meeting resolved on private placement of securities. However, the above-mentioned profitability restriction shall not apply if, because of a change in the business cycle of the industry, the average of the three fiscal years before the application is not less than 200 percent of that of the fiscal year that, or of the average of the 3 fiscal years before, the shareholders meeting resolved on the private placement of securities, and the average reaches 4 percent or more:
- The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, part or all of the privately placed shares have been transferred to the holding of any insider(s) or related party(ies) of the applicant company.
- The private placement did not introduce strategic investors.
- There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TPEx, and at the time the company applies for the letter of approval for listing of the privately placed securities, part or all of the securities have been transferred to the holding of any insider(s) or related party(ies) of the applicant company.
- The conducting of the private placement of securities was not done in accordance with the Directions for Public Companies Conducting Private Placements of Securities ("the Directions for Private Placements"), where the circumstances were serious.
- For an applicant company that had net loss after tax or accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of net income before tax to year-end share capital for the most recent fiscal year shall be 6 percent or higher:
- Any insider or related party of the company participates in the private placement, and the subscription price does not comply with the percentage requirements set out by the Competent Authority.
- The private placement of securities is not carried out in accordance with the Directions for Private Placements, and the circumstances are serious.
- Others consistent with the provisions of the Competent Authority.
For a company listed on the TPEx based on an application submitted under Article 3, paragraph 1, subparagraph 2, item B, or paragraph 4 of the same article, that has never obtained a letter of approval from the TPEx under the preceding paragraph and that has obtained a special resolution of its shareholders passed at a shareholders meeting for filing the retrospective public issuance with respect to a private placement of securities, when the company applies for a letter of approval under paragraph 11, it need not be subject to the provisions of subparagraph 2 of the preceding paragraph if it satisfies the conditions of the following subparagraphs:
- The privately placed securities have not been transferred within 6 years since the date of delivery, provided that this restriction does not apply where a transfer is effected by operation of law.
- The price fixed for the privately placed securities is not lower than 80 percent of the reference price or theoretical price.
- The placees for the privately placed securities are not insiders or related parties of the company.
- The combined total of the privately placed common shares for which it has applied for issuance of a letter of approval under this paragraph during the last 3 years and of the common shares for which its equity-type securities are exercisable or convertible, does not exceed 20 percent of its shares already listed on the TPEx as of the time of application. This restriction, however, does not apply where the above limit is exceeded but the relevant holders of shares have made arrangement among themselves and promised to place all of the exceeding shares in central custody before listing on the TPEx. For the shares placed in central custody, the time periods and amounts they are allowed to be withdrawn shall be subject mutatis mutandis to the provisions of Article 3, paragraph 2 of the TPEx "Rules Relating to Article 3, Paragraph 1, Subparagraph 4 of the Taipei Exchange Rules Governing the Review of Securities for Trading on the TPEx".
- Since the date of TPEx listing, there has never occurred any material change in the scope of its business as set out in Article 12-1, paragraph 1, subparagraph 17 of the TPEx Trading Rules; provide that this restriction does not apply if such a change was due to industry characteristics or any other reasonable causes.
"Net worth," "net income (or loss) before tax," and "net income (or loss) after tax" in paragraph 12 refer to the amounts attributable to the owners of the parent company. Additionally, prior to the TPEx listing, all privately placed shares held by non-strategic investors, insiders, and related parties as referred to in subparagraph 8 or 9 of paragraph 12, shall be placed in central custody with a central securities depository enterprise incorporated with the approval of the Competent Authority. One half of the shares placed in central custody may be withdrawn only after the lapse of a 6-month period starting from the date of commencement of TPEx listed trading; the remaining shares may be withdrawn in full only after the lapse of a 1-year period starting from the date of commencement of TPEx listed trading. The custodial agreement may not be rescinded during the term, and the shares in central custody may not be transferred or pledged. The validity of central custody shall not be affected by a change of the identity of the holders of shares in central custody.
Where the competent authority has placed restrictions on TPEx trading of securities issued by a public issuer, no application for TPEx trading of its privately placed securities may be made until such restrictions have been lifted, even if the period of restriction of transfer of those securities referred to in the preceding paragraph has expired.
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| Article 15-1 |
When an issuer applies to the TPEx for TPEx trading of principal-only corporate strips and interest-only corporate strips (collectively, "corporate strips")created by stripping the principal and interest of straight corporate bonds into separate components, or of principal-only financial strips and interest-only financial strips (collectively "financial strips") created by stripping the principal and interest of financial bonds into separate components, it shall meet the conditions in each of the following subparagraphs:
- The straight corporate bonds or financial bonds shall be confined to those for which delivery is handled by book-entry transfer under the Regulations Governing Business Operation of the Taiwan Depository & Clearing Corporation.
- The straight corporate bonds or financial bonds may not have any rights attached such as repurchase rights of an issuer or reverse repurchase rights of an investor.
- The issuer’s obligation to pay with respect to the interest-only corporate strips or interest-only financial strips does not change after the issuer has undertaken to repurchase the principal-only corporate strips or principal-only financial strips.
- The operational methods for payment of the principal and interest on the straight corporate bonds or financial bonds can be adjusted to accommodate the corporate strips or financial strips.
When an issuer of straight corporate bonds that are already traded on the TPEx applies for TPEx trading of strips of those bonds, or an issuer of financial bonds that are already traded on the TPEx applies for TPEx trading of strips of those bonds, it shall complete an Application for TPEx Trading of Stripped Corporate Bonds or Financial Bonds and submit it, annexing the required documents, to the TPEx; provided, if a statement specifying that stripping of the straight corporate bonds or financial bonds is allowed was submitted at the time the application for TPEx trading of those bonds was applied for, and separate securities codes have been obtained for the principal and interest components, it is not necessary to file a new application.
A securities firm that has obtained [a license] to operate proprietary bond trading business may submit an Application to Strip Corporate Bonds or Financial Bonds to the TPEx in application to strip straight corporate bonds or financial bonds into principal and interest components; or submit an Application to Reconstitute Corporate Bonds or Financial Bonds to the TPEx in application to reconstitute corporate strips into straight corporate bonds, or in application to reconstitute financial strips into financial bonds.
When applications are filed at different times for stripping of the same class of straight corporate bonds or financial bonds, the Interest Allocation Basis Table for those for which stripping was first applied for shall uniformly apply.
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| Article 16 |
The guidelines for examination of other securities for trading on the TPEx not provided in these Rules shall be separately prescribed by the TPEx. The TPEx may separately prescribe supplemental provisions of these Rules based on the features of the business or organizational type of the issuers.
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| Article 17 |
These Rules, and any amendments hereto, shall become effective after they have been passed by a board of directors meeting of the TPEx and reported to the Competent Authority for recordation. Amendment to relevant attachments hereto shall be implemented after being approved by the President of the TPEx.
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