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These Supplemental Directions shall apply to all public companies applying for listing of their stock on the Taipei Exchange (TPEx) to which either of the following conditions has applied in the two most recent fiscal years:
- Operating revenue from software equals 50 percent or more of its total operating revenue.
- Gross profit from software equals 50 percent or more of its total gross profit.
The term "software" as used in the preceding paragraph shall refer to package software, professional services, turnkey systems, system integration businesses, network services, and processing services.
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A software company shall have been organized and registered under the Company Act for two complete fiscal years before filing an application for TPEx listing of its stock.
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When conducting assessment and auditing operations for an initial application for TPEx listing by a software company, a recommending securities firm shall, in addition to complying with the Taipei Exchange Assessment and Auditing Procedures for Recommending Securities Firms Handling Initial Applications for TPEx Listing, give guidance and carry out assessment and audits with respect to the following matters:
- Research and development competence and internal management system:Obtain information about the competitive advantages, life cycles, and potential for continuing development of the company's present core products, the R&D plan for its new products, and levels and sources of its production and development technologies, so as to assess relevant market positioning, demands, and possibility to meet expectations of future profit and benefit, and R&D-related internal control systems and safeguarding measures.
- Business stability:Obtain information about the company's operating revenue for the three most recent years and analyze such information by business, product, client, area, and sales channel, so as to assess the company's business stability.
- Transfer of shares:Obtain information about the work experience and qualifications, shareholding percentages, transfers of shares during the three most recent fiscal years and the year of application, and time and circumstances of actual commitment to business operations of decision-making directors, shareholders holding more than 5 percent of the total shares, shareholders providing patent rights or technical know-how as capital contribution, and managers in control of production technologies and technology development, so as to assess the potential impact on the company if such persons in the future were no longer able to participate in its decision-making, and countermeasures that would be taken.
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[Deleted]
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A software company's directors, shareholders holding more than 5 percent of the total shares, and shareholders providing patent rights or technical know-how as capital contribution and holding a position in the company and at least 0.5 percent or 100,000 shares of its total outstanding shares at the time of the application for TPEx listing, shall place their shares in centralized 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 that this provision shall not apply where during the emerging stock registration period of the company, its recommending securities firms holds more than 5 percent of its total outstanding shares as a result of subscription or trading of operating securities
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These Supplemental Directions shall not apply where the central government authority in charge of the relevant industry has issued an unequivocal opinion certifying that the public company is a technology-based enterprise and that its products or technologies are successfully developed and thus marketable.
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These Supplemental Directions, and any amendments hereto, shall take effect upon review and recordation by the competent authority after passage by the board of directors of the Taipei Exchange.
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