| Article 4 |
A foreign issuer applying for a TPEx primary listing of common stock shall meet the following conditions:
- It is a company limited by shares organized and registered under foreign law, and has not violated any applicable provision of the Act Governing Relations Between the Peoples of the Taiwan Area and the Mainland Area, provided that if individuals, juristic persons, groups, or other institutions from the Mainland Area have direct or indirect shareholding or capital contribution exceeding 30 percent in, or effective control over, the foreign issuer, special-case permission shall be obtained from the competent authority; and the foreign issuer furthermore must have filed for retroactive public issuance of the stock pursuant to the provisions of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers.
- Its issued registered stock is not listed for trading on any overseas securities market.
- Its total equity attributable to owners of the parent company as audited and attested by a CPA for the most recent period is equivalent to at least NT$100 million.
- It has been incorporated and registered in accordance with foreign law for at least 2 full accounting years.
- The financial reports prepared by the foreign issuer shall comply with the following requirements:
- The content shall be stated in units of New Taiwan Dollars.
- The Chinese language version shall govern; an English version may also be submitted in addition thereto.
- The financial reports shall be prepared in accordance with international financial reporting standards recognized by the Competent Authority, US accounting standards, or the International Financial Reporting Standards.
- It shall be produced using period-on-period comparison, and shall include balance sheets, statements of comprehensive income, cash flow statements, statements of changes in equity, and related notes. The notes to the financial report shall state which accounting principles are employed If they are prepared according to international financial reporting standards recognized by the Competent Authority, then Taiwan's Regulations Governing the Preparation of Financial Reports by Securities Issuers shall govern, provided that Article 24 thereof need not be applied. If they are not prepared according to international financial reporting standards recognized by the Competent Authority, then the differences in the disclosure of the period-on-period balance sheet and the comprehensive income statement titles with the international financial reporting standards recognized by the Competent Authority shall be disclosed, including any material discrepancies and the dollar amounts affected.
- It shall have an audit (or review) report issued by two Taiwan CPAs approved by the Competent Authority to perform attestation of financial reports for public companies; or have been audited and attested (or reviewed) by an international accounting firm that has a cooperative relationship with the aforesaid CPAs, and have an audit (or review) report that is issued by the Taiwan CPAs and that does not make reference to audit (or review) work by any other accountant.
- It shall be signed or stamped with the seal of the chairperson, managerial officers, and principal accounting officers, who shall also produce a declaration that the report contains no misrepresentations or nondisclosures.
- In the audit (or review) report, the CPAs shall explain the accounting principles adopted by the foreign issuer and the differences between those principles and the international financial reporting standards recognized by the Competent Authority, and include an index to the notes, and shall expressly state that the report has been audited in accordance with Taiwan's Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards (or that the review work has been planned and executed in accordance with Statement of Auditing Standards No. 36: Engagements to Review Financial Statements).
- If the stock has no par value or the par value per share is other than NT$10, in the application of the provision of Article 6 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers regarding 5 percent or more of paid-in capital, 2.5 percent of equity attributable to owners of the parent company shall be substituted; for the provision of Article 17 thereof regarding 20 percent or more of paid-in capital, 10 percent of equity attributable to owners of the parent company shall be substituted.
- Based on the financial report prepared in accordance with the international financial reporting standards recognized by the Competent Authority, net income before tax, excluding net income (or loss) from non-controlling interests for the most recent fiscal year, may not be less than the equivalent of NT$4 million, and furthermore, its ratio to the amount of equity attributable to owners of the parent company shall meet one of the following conditions:
- Having reached 4 percent or higher in the most recent fiscal year, with no accumulated deficit after final accounting for the most recent fiscal year.
- Having reached 3 percent or higher in both of the most recent 2 fiscal years.
- The average of the most recent 2 fiscal years is 3 percent or higher, and profitability in the most recent fiscal year is higher than that of the preceding fiscal year.
- The company, excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, has at least 300 registered shareholders, and the combined shareholdings those shareholders account for 20 percent or more of the total issued shares, or more than 10 million shares, of the applicant company.
- The directors, supervisors, and the shareholders holding 10 percent or more of the total issued shares of the company 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 Article 5 of these Rules.
- 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 co-recommending securities firm(s). The recommending securities firms shall sign a TPEx stock listing advisory contract with the foreign issuer. The foreign issuer shall continue to engage a lead recommending securities firm during the fiscal year of TPEx listing and the following 2 fiscal years to assist it with compliance with Taiwan's securities laws and regulations, the rules and bylaws public announcements of the TPEx, and the Foreign Issuer TPEx Primary Listing Contract (Attachment 5).
- It shall have engaged a professional shareholder services agent within the territory of the Republic of China (ROC) to handle shareholder services.
- It shall have appointed at least one litigious and non-litigious agent domiciled or residing within the territory of Taiwan; the primary duty of the agent is to facilitate effective delivery of documents between the TPEx and the foreign issuer, to notify it of matters requiring its action, and ensure its compliance with Taiwan's securities laws and regulations, the rules, bylaws, and public announcements of the TPEx, and the Foreign Issuer TPEx Primary Listing Contract, and related matters.
- A period of not less than 6 months must have elapsed from the issuer's filing for TPEx-listing advisory guidance or from the trading of its stock on the emerging stock market, provided that if there is any change in the lead advisory securities firm or emerging-stock lead advisory recommending securities firm, the issuer shall receive the required advisory services from the new lead advisory securities firm or emerging-stock lead advisory recommending securities firm, and then a further period of not less than 1 months must elapse from the filing for advisory guidance or from the trading of its stock on the emerging stock market before it may submit its application for TPEx listing.
- The issuer shall undertake that it will comply in the following matters:
- Complying with the ROC Securities and Exchange Act and related laws, regulations, and policies.
- Cooperating with on-site audits by the TPEx as necessary, and appointing at the TPEx's request a designated CPA or professional institution to conduct a targeted examination within the audit scope designated by the TPEx. The issuer will submit the examination results to the TPEx, and agrees to bear any related expenses.
- TPEx-listed shares shall be delivered by book-entry transfer.
- Important matters in connection with protection of shareholder equity. If such matters conflict with mandatory provisions of laws or regulations in the issuer's country of registration, the issuer shall enhance the disclosure of any material discrepancies in its public prospectus. If such matters are not in conflict with mandatory provisions of law of the issuer's country of registration, they shall be specified in the company's articles of incorporation or organizational documents. If specified in the organizational documents, the articles of incorporation shall state that such matters will be separately dealt with in the organizational documents, and the procedures for adoption and amendment of the organizational documents shall be the same as for the articles of incorporation.
- The foreign issuer shall continue to engage a lead recommending securities firm during the fiscal year of TPEx listing and the following 2 fiscal years to assist it with compliance with Taiwan's securities laws and regulations, the rules and bylaws public announcements of the TPEx, and the Foreign Issuer TPEx Primary Listing Contract.
- If, with respect to important matters connected with the protection of shareholder equity, the laws of the country where the issuer is registered contain provisions regarding exclusive jurisdiction of courts that exclude the jurisdiction of ROC courts, and further, if the jurisdiction of ROC courts is not specified within the issuer's articles of incorporation, the issuer shall take out directors liability insurance and maintain it throughout the period of TPEx listing.
- The laws of the Republic of China shall be the applicable law for the Foreign Issuer TPEx Primary Listing Contract entered into by the foreign issuer. The Taiwan Taipei District Court shall be the competent court for litigation in the event of any dispute arising in connection with the Contract.
- A remuneration committee shall be established pursuant to Article14-6 of the Securities and Exchange Act and related regulations, which shall be applicable mutatis mutandis.
- If provisions of the ROC Securities and Exchange Act that are applicable mutatis mutandis are in conflict with mandatory provisions of law of the issuer's country of registration, the mutatis mutandis application of those provisions may be excluded only if they fall within the scope of specific provisions of the Securities and Exchange Act for which the competent authority has publicly announced an exemption from application.
- 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.
- Its articles of incorporation shall specify the following matters:
- It shall adopt electronic means as one of the methods for shareholders to exercise voting rights.
- The candidate nomination system shall be adopted for the election of the company's directors and supervisors.
The professional shareholder services institution referred to in paragraph 1, subparagraph 10 shall have documents evidencing the following issued by the Taiwan Depository & Clearing Corporation (TDCC):
- Its personnel and equipment for handling shareholder services all are in compliance with the Regulations Governing the Administration of Shareholder Services of Public Companies.
- There has been no instance in the preceding 3 years in which, after a TDCC audit, the TDCC has made written suggestions for improvement, and it has failed to make improvements by the deadline.
When a foreign issuer applies for a TPEx primary listing and the issuer meets the conditions set out in any of the below-listed subparagraphs, the issuer may proceed in accordance with the provisions of that subparagraph, and thereby be exempted from the application of paragraph 1, subparagraph 12; provided that a foreign issuer that has submitted and obtained approval for its scheduled plan for the appointment of independent directors and reorganization of the board of directors shall, no later than by the time of the TPEx primary listing of the stocks, meet the requirement specified in Article 9, paragraph 1, subparagraph 5 hereto:
- If a foreign issuer's stock has already traded on a main foreign securities market, when the foreign issuer applies for the TPEx primary listing, the period of not less than 6 months for filing of TPEx-listing advisory guidance or for trading on the emerging stock market is not required, provided that this subparagraph shall not apply if a period of more than 6 months has elapsed since termination of trading of the stock on the main foreign securities market.
- If a foreign issuer's stock has already passed review for listing on a main foreign securities market, and the foreign issuer applies for a TPEx primary listing during the period of validity of passage of the listing review, the issuer may apply on a special-case basis for reduction of the period for filing of TPEx-listing advisory guidance or trading on the emerging stock market, provided that the period still may not be less than 2 months, and the lead advisory securities firm or emerging-stock lead advisory recommending securities firm may not be changed during the period.
If the foreign issuer obtains from the Ministry of Economic Affairs Industrial Development Bureau or the TPEx-designated professional institution an assessment opinion indicating that the company is a technology enterprise and has successfully developed products or technology with marketability ("technology enterprise"), it may be exempted from the provisions of paragraph 1, subparagraphs 4 and 6; provided that the foreign issuer's net worth shall not be less than two-thirds of the share capital shown in the latest CPA-audited and attested or reviewed financial report, and the foreign issuer shall, in the year of TPEx listing and the three subsequent fiscal years, continuously engage the lead recommending securities firm to assist it in complying with ROC securities acts and regulations, the TPEx bylaws, rules, and public announcements, and the TPEx primary listing contract of the foreign issuer, and its directors, supervisors, general managers, R&D managers, shareholders holding 5 percent or more of the total number of shares, and shareholders who have provided patent rights or technical know-how as capital contribution and hold a position in the company and moreover hold 0.5 percent or more of the shares or at least 100,000 shares, shall carry out the placement of their shares in centralized custody, withdrawal of shares from custody at expiration of the custody period, and related matters in accordance with paragraph 1, subparagraph 8.
When a foreign issuer applies for a TPEx primary listing of common stock, if, during the most recent 2 fiscal years, its operating revenue derived from construction business represents 40 percent or greater of its total operating revenue, or its gross profit derived from construction business represents 40 percent or greater of its total gross profit, or its operating revenue or gross profit derived from construction business is more than that derived from other business items, it shall be subject to the mutatis mutandis application of the TPEx Supplemental Directions for Applications by Construction Companies for TPEx Listing. However, the paid-in capital requirement under Article 2, paragraph 1, subparagraph 2 of those Supplemental Directions shall be calculated instead on the basis of equity attributable to owners of the parent company, and the imputed profitability calculation under Article 2, paragraph 1, subparagraph 6 thereof shall be replaced instead by the conditions set out in paragraph 1, subparagraph 6 of the present Article. The foreign issuer may be exempted from the requirements of Article 3, paragraph 1, subparagraphs 1 to 3 of those Supplemental Directions if the construction company and the foreign issuer are not related parties, and the foreign issuer has established complete internal control systems and tender procedures for contracting projects out, and the payment terms comply with usages of trade.
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| Article 5 |
A foreign issuer's directors, supervisors, and shareholders with shareholding of 10 percent or more; or a technology enterprise's directors, supervisors, general managers, R&D managers, shareholders holding 5 percent or more of the total number of shares, and shareholders providing patent rights or technical know-how as capital contribution and holding a position in the company and moreover holding 0.5 percent or more of the shares or at least 100,000 shares; shall place in central custody the full amount of the shares they hold as set out in the application documents after deduction of the number of shares allocated to the recommending securities firm for underwriting, and the total shares placed in central custody shall not be less than a percentage - calculated in accordance with the paragraph 2 - of the total number of shares of common stock already offered and issued by the company at the time of application for TPEx listing. If there is any deficit, arrangements shall be made with other shareholders to make up the deficit, provided that this restriction shall not apply to the issuer's recommending securities firm where it holds 5 percent or more of the enterprise's total issued shares during the emerging stock registration period as a result of subscription or trading of operating securities.
The total percentage of total shares that must be placed in central custody at the time of application for TPEx listing in accordance with the preceding paragraph shall be calculated as follows:
- If the total number of shares at the time of application for TPEx listing is 30 million or fewer, 25 percent of the total number of shares shall be placed in central custody.
- If the total number of shares at the time of application for TPEx listing is greater than 30 million but not more than 100 million, in addition to doing as specified in the preceding subparagraph, the party shall place in central custody 20 percent of those shares in excess of 30 million.
- If the total number of shares at the time of application for TPEx listing is greater than 100 million but not more than 200 million, in addition to doing as specified in the preceding subparagraph, the party shall place in central custody 10 percent of those shares in excess of 100 million.
- If the total number of shares at the time of application for TPEx listing is greater than 200 million, in addition to doing as specified in the preceding subparagraph, the party shall place in central custody 5 percent of those shares in excess of 200 million.
If a person who is required to place shares in central custody, during the period between the date of application for TPEx listing and the listing date, obtains capital increase shares due to a share issue for capital increase by the issuing company, or obtain shares for another reason, the shares shall be transferred in full to central custody, and may not be pledged, transferred, or otherwise disposed of. Persons who have not yet actually received the shares as of the listing date shall undertake that they will submit those shares to central custody after their receipt. "Another reason" refers to a reason such as acquisition through succession, receipt of a gift, or purchase on the Emerging Stock Market.
Any shares that were allocated for underwriting by the recommending securities firm and thus originally deducted from the amount required to be submitted for central custody, but that could not actually be sold in an overallotment (greenshoe allotment) shall be placed in central custody after their return by the recommending securities firm and prior to listing. Shares bought back from the market by the recommending securities firm while implementing price stabilization measures during the first 5 business days after listing need not be placed in central custody.
The designated central custodian institution is the TDCC.
One-half of the shares that were duly placed in custody may be withdrawn upon expiration of the 6-month period following the day that TPEx trading of the issuer's shares commences, provided that in the case of a technology enterprise, all of the shares may be withdrawn only upon expiration of the two-year period.
The full amount of the remaining shares that were duly placed in custody may be withdrawn upon expiration of the 1-year period following the day that TPEx trading of the issuer's shares commences, provided that in the case of a technology enterprise, all of the shares may be withdrawn only upon expiration of the two-year period.
The effect of stock custody shall not be affected by any change of an original holder's status.
During the custody period, a person who is required to place shares in central custody may not rescind the custody contract, and the custodial receipt may not be transferred or pledged.
If, prior to expiration of the custody period, as a result of withdrawal of shares by operation of court orders or for other causes, the shares placed in central custody under relevant regulations fall below the number required for central custody for such custody period as calculated pursuant to regulations, the foreign issuer's responsible person shall coordinate to remedy the deficit within 1 month.
If a TPEx listed company fails to observe relevant regulations by remedying its deficit of shares required for central custody, the TPEx may impose a penalty of NT$50,000 on a case-by-case basis and notify the company by letter to make corrections within 2 days from receipt of the letter, and, if the company still fails to make corrections within that time limit, a further penalty of NT$10,000 may be imposed on a daily basis until the day corrective measures are taken.
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| Article 6 |
A foreign issuer applying for the first time for TPEx trading of its stock shall, out of the total shares planned for TPEx listing, allocate a specified percentage for cash capital increase through a new share issue, and, after deducting the number of shares reserved for employee subscription as provided in its articles of incorporation, engage the recommending securities firms referred to in Article 4, paragraph 1, subparagraph 9 herein to offer all of the remaining shares for public sale prior to the TPEx listing.
The foreign issuer may use shares already offered and issued as a greenshoe (over-allotment) for stabilization of the underwriting price by the recommending securities firms; these shares also constitute a portion of the public sale prior to the TPEx listing.
The number of shares reserved for employee subscription referred to in paragraph 1 may not exceed 15 percent of the total number of new shares issued.
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| Article 7 |
A foreign issuer applying for the first time for TPEx trading of its stock shall allocate at least 10 percent of the amount of the total shares it intends for TPEx listing and retain the recommending securities firms to underwrite the shares; provided, if the number of shares calculated by such percentage is less than 1 million, no less than 1 million shares shall be provided for underwriting, or, if the number of shares so calculated exceeds 10 million shares, no less than 10 million shares shall be provided for underwriting.
Stock allocated for underwriting shall be confined to issued common shares.
If the foreign issuer has commenced TPEx trading of its stock as emerging stock for less than 2 years, the number of shares it has duly provided for subscription by the recommending securities firm for such emerging stock may be deducted from the number of shares it provides for underwriting hereunder, provided that the deduction shall not exceed 30 percent of the shares provided for underwriting hereunder.
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| Article 8 |
A securities firm that is recommending stock for TPEx trading under Article 4, paragraph 1, subparagraph 9 shall be a registered member of the Taiwan Securities Association, and shall be qualified in Taiwan as a securities underwriter and TPEx securities dealer, and shall meet the conditions set out in Article 23 of the Regulations Governing Securities Firms. However, in the case of a foreign issuer applying for an initial listing on the TPEx, if not less than 6 months have elapsed from the issuer's filing for TPEx-listing advisory guidance pursuant to Article 4, paragraph 1, subparagraph 12, and its stock has not been traded on the emerging stock market, a securities firm that is qualified merely as a securities underwriter may serve as a recommending securities firm.
If any of the following circumstances exists with respect to the foreign issuer or a recommending securities firm, the TPEx will refuse to accept the assessment report issued by the recommending securities firm and will not approve the TPEx listing of the stock:
- Any circumstance set out in Article 26 of the Regulations Governing Securities Firms; or
- If the issuer and recommending securities firm are from the same corporate group.
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| Article 9 |
Although a foreign issuer meets the conditions set out in these Rules, the TPEx may deny approval for TPEx trading of its stock under any of the following circumstances, if the TPEx deems it unsuitable for TPEx trading:
- Any circumstance set out in Article 156, paragraph 1, subparagraph 1 to 3 of the Securities and Exchange Act.
- The issuer's finances or business cannot be independently differentiated from those of another person.
- Any material non-arm's length transaction which has not been corrected by the time of the application.
- Within the past 3 years any act in violation of the principle of good faith was done by the company or by any director, supervisor, general manager, or de facto responsible person thereof who is incumbent at the time of the application.
- The board of directors or supervisors of the applicant company are unable to independently perform their duties.
- There is serious deterioration in the business it operates.
- The TPEx deems TPEx listing of the stock unsuitable due to the scope or nature of, or special circumstances relating to, the enterprise.
The termination date of the period of applicability of the items in the subparagraphs of the preceding paragraph shall be the day before the date on which the TPEx issues a letter notifying the issuer of its agreement to the Foreign Issuer TPEx Primary Listing Contract.
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| Article 10 |
Specific standards for a determination under Article 9, paragraph 1, subparagraph 1:
- The issuer of the securities becomes involved in litigious or non-litigious matters the consequences of which could cause company dissolution, or change in corporate organization, capital, business plan, financial condition, or suspension of production, and there is a likelihood that market order will be affected or the public interest impaired.
- The issuer of the securities encounters a significant disaster, enters into an important agreement, experiences exceptional circumstances, changes important content of its business plan, or has a check dishonored, the consequences of which could cause significant material change to the financial condition of the company, and there is a likelihood market order will be affected or the public interest impaired.
- The issuer of the securities engages in any deceptive, dishonest, or illegal conduct, sufficient to affect the price of its securities, and there is a likelihood market order will be affected or the public interest impaired.
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| Article 11 |
Specific standards for a determination under Article 9, paragraph 1, subparagraph 2:
- An excessive share of the applicant company's funds comes from non-financial institutions.
- The applicant has entered into any contract that materially limits its operations or that is obviously unreasonable, with a likelihood that adverse effects will occur.
- The applicant company jointly shares a loan credit line with another party in which its own credit use cannot be clearly distinguished. This provision does not apply, however, to a joint loan credit line that is shared between business entities that are included in the consolidated financial statement of the foreign issuer.
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| Article 12 |
Specific standards for a determination under Article 9, paragraph 1, subparagraph 3:
- Where the purpose, prices, or terms and conditions with respect to, or the handling procedures for, a purchase or sale of goods are at variance with those of an ordinary arm's-length transaction or are obviously unreasonable.
- In any related party transaction, the applicant is unable to reasonably demonstrate the necessity of the transaction, the legality of its decision-making process, and the reasonableness of the price and the payment/collection of monies (including by comparison with its transactions with unrelated parties or comparison with transactions by other entities in the same industry).
- A determination of whether correction has been made with respect to the phrase "has not been corrected" shall be based upon any of the following circumstances:
- If a person other than the applicant company profited from the non-arm's length transaction, the receiving person disgorged such profit to the person entitled to it.
- If an investigating or judicial agency has determined that the non-arm's length transaction does not constitute a criminal offense.
- The status quo ante has been restored with respect to the non-arm's length transaction.
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| Article 13 |
Specific standards for a determination under Article 9, paragraph 1, subparagraph 4:
- The term "within the past 3 years " refers to the 3-year period starting from the date on which the TPEx receives and accepts for processing the company's application for TPEx listing.
- The term "act in violation of the principle of good faith" means any of the following circumstances on the part of the applicant company or any director, supervisor, managerial officer, or de facto responsible person thereof:
- Tardy repayment of a loan from a financial institution.
- A criminal conviction of a violation of any relevant law or regulation of the country where the foreign issuer is registered.
- Breach of any representation made in a written statement submitted at the time of application for TPEx listing.
- Any other material misrepresentation or other act that would damage the company's creditworthiness, and that is likely to harm company interests or shareholder equity or the public interest.
- If an act under subparagraph (1) to (3) hereinabove is not serious, or is reasonably justified, it shall not count for the purposes hereof.
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| Article 14 |
Specific standards for a determination under Article 9, paragraph 1, subparagraph 5:
- The applicant company shall have at least five member seats on its board of directors, among which the independent director seats shall be no fewer than two seats, and furthermore shall be no fewer than one-fifth of the director seats. If the applicant company's chairperson and the general manager are the same person, or are spouses or relatives within one degree of kinship, the independent director seats shall be no fewer than three seats, and furthermore shall be no fewer than one-fifth of the director seats. At least one of the independent directors must be domiciled in Taiwan. However, if with respect to important matters connected with the protection of shareholder equity, the laws of the country where the issuer is registered contain provisions regarding exclusive jurisdiction of courts that exclude the jurisdiction of ROC courts, and further, if the jurisdiction of ROC courts is not specified within the issuer's articles of incorporation, it must have at least two directors (which may include independent directors) domiciled in Taiwan.
- The applicant company shall choose to establish either an audit committee or supervisors. The audit committee shall be composed of the entire number of independent directors. It shall not be fewer than three persons in number, one of whom shall be the convenor. The supervisors may not be fewer than three persons in number.
- More than one-half of the directors of the applicant company shall mutually be free of, and at least one or more of the supervisors shall mutually be free of, any of the following relationships:
- Spouse.
- Lineal relative within the second degree of kinship.
- Representative of the same juristic person.
Representatives of the same juristic person may not serve concurrently as director and supervisor of the applicant company; and at least one or more director and supervisor seats shall mutually be free of any of the following relationships
- Spouse.
- Lineal relative within the second degree of kinship.
Representatives of the same juristic person include representatives appointed by the government, juristic person shareholders, or entities with a controlling or subsidiary relationship therewith (including incorporated foundations and incorporated associations).
- Prerequisites to serve as an independent director:
- Meet the conditions of substantive independence set out in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
- The independent directors shall include at least one professional in accounting or finance.
- Have pursued continuing education every year (counting from the day on which the recommending securities firms and the company entered into the advisory contract) for at least three hours in legal affairs, finance, or accounting and obtained certification documents issued through an external continuing education system separate from the recommending securities firm, certifying that the independent director has taught courses, attended courses, participated as a discussant in symposia, or the like.
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| Article 14-1 |
The specific standards for a determination under Article 9, paragraph 1, subparagraph 6 are that if the applicant company falls in any of the following circumstances, the TPEx may determine there to be serious deterioration in the business it operates:
- Operating revenue and operating income for the most recent fiscal year or the fiscal year in which the application for TPEx listing is filed show a significant deterioration relative to other enterprises in the same industry.
- Net income before tax for the most recent fiscal year or the fiscal year in which the application for TPEx listing is filed show a significant deterioration relative to other enterprises in the same industry.
- There is continuing negative growth in operating revenue and operating income for each of the 3 most recent fiscal years.
- There is continuing negative growth in net income before tax for each of the 3 most recent fiscal years.
- The company's products or technology are outdated, and it has no plan for improvement.
The provisions of the preceding paragraph do not apply if on the applicant company's financial report for the most recent fiscal year the ratio of net income before tax excluding net income (or loss) from non-controlling interests to the amount of equity attributable to owners of the parent company is 6 percent or more.
For the "other enterprises in the same industry" in paragraph 1, subparagraphs 1 and 2, the securities underwriter shall evaluate and explain the reasonableness of the enterprises sampled for the comparison.
The provisions of subparagraphs 3 and 4 of paragraph 1 do not apply to a company that already has a concrete improvement plan that is producing positive effects.
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| Article 15 |
The foreign issuer shall enter into a Foreign Issuer TPEx Primary Listing Contract with the TPEx before permission for TPEx trading will be given.
When the TPEx agrees to a Foreign Issuer TPEx Primary Listing Contract, it shall issue a letter of notification to the issuer and report the matter to the competent authority for recordation.
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