| Article 12-1 |
In the event that an issuer has any of the following conditions, the GreTai may report to the Competent Authority for suspension of trading its securities on the OTC Market, or the issuer may apply for termination of trading its securities on the OTC Market after approval by the Competent Authority; provided, where the circumstance in subparagraph 1 applies to an issuer, the GreTai may first proceed to announce suspension of OTC trading of its securities and then apply to the Competent Authority for recordation:
1. Where the issuer meets the condition under Article 282 of the Company Act and the court makes a ruling to prohibit its stocks from being transferred in accordance with subparagraph 5 of paragraph 1 of Article 287 of the Company Act.
2. Where the issuer has established a securities transfer institution at the locale of the GreTai and subsequently withdraws the same or it nominally sets up a transfer institution without actually handling transfer business, and the GreTai requires that improvement be made within a specified time limit but no improvement is made.
3. Where the documents/statements or information submitted are discovered to contain false statement, and the GreTai requires an explanation but no reasonable explanation is provided within the specified time limit.
4. Where the issuer fails to make public announcement or report of a financial report or financial forecast by the deadlines provided in laws and regulations.
5. Where the financial report publicly announced or reported under Article 36 of the Securities and Exchange Act fails to comply with relevant regulations and generally accepted accounting principles to serious extent, and the said report is not duly rectified or re-compiled within the time limit; or where in connection with the publicly announced and reported annual or semi-annual financial, the certifying CPA issues an audit report containing a disclaimer of opinion or an adverse opinion in the audit report, or issues an adverse opinion or disclaimer of opinion in the review report.
6. Where the issuer has any of the conditions under Article 9 of the Handling Procedures of the OTC Securities Exchange for Verification and Publication of Material Information of OTC Companies, Article 7 of the OTC Securities Exchange Operation Procedures for Press Conference Regarding Material Information of OTC Companies, Article 11 of the Handling Procedures of Routine and Exceptional Administration Regarding Finance and Business of OTC Companies, Article 8 of the Handling Procedures for Verification and Publication of Material Information of Foreign Securities, and Article 6 of the Rules Governing Submission of Information by OCT Companies, and the condition is serious enough to necessitate termination of trading of its securities.
7. Where the issuer has materially violated the undertakings for trading on the OTC Market.
8. Where a private enterprise undertaking public construction project has serious schedule delay or other serious default or breach of construction or operation contract.
9. Where a negotiable instrument has been dishonored by a financial institution because of insufficient funds on deposit and the issuer has failed to accomplish remedial procedures as set forth in paragraph 4, subparagraph 3 of the preceding Article and submit relevant written documentation within three months of a disposition referred to in the preceding article.
10. Where the issuer is unable to redeem a bond at maturity or on creditor demand, and has not repaid its debt or reached an agreement with its creditor resolving the relevant debt issue within three months after a disposition has been made under the preceding Article.
11. Where a financial holding company loses its controlling interest, as defined in subparagraph 1 of Article 4 of the Financial Holding Company Act, in a banking subsidiary, insurance subsidiary, or securities subsidiary, and the Competent Authority has ordered it to make corrections by a certain deadline.
12. Where the number of companies held by an investment holding company falls below two companies, and improvement has not been made after three months have elapsed following disposition pursuant to Article 12, provided that this requirement shall not apply to a primary OTC-listed company.
13. Where, after a company demerger, paid-in capital fails to reach standards, and improvement has not been made after three months have elapsed following disposition pursuant to Article 12.
14. Where an already OTC-listed parent company (including a financial holding company or investment holding company) fails to abide by an undertaking to purchase the shares of minority shareholders of a listed/OTC subsidiary in which it has shareholding of more than 70 percent.
15. Where there is any other condition for which the trading of securities on the OTC market shall be terminated in accordance with GreTai rules or opinions of the GreTai.
If the trading of the issuer's securities on the OTC Market is suspended due to one of the situations referred to in the preceding paragraph, the issuer may, upon extinction of the said situations, submit relevant supporting documents to apply for reinstatement of trading. The GreTai shall publicly announce the reinstatement of trading after reporting to the Competent Authority for approval. Where suspension of trading was ordered pursuant to subparagraph 9 of the preceding paragraph, and remedial procedures as set forth in paragraph 4, subparagraph 3 of the preceding article have been accomplished and relevant written documentation submitted, the cause of suspension shall be deemed extinguished.
Except in the case of suspension of trading under subparagraph 1 of paragraph 1, the GreTai shall publicly announce any securities whose trading is approved to be suspended or terminated by the Competent Authority in accordance with the provisions in paragraph 1 above 2 business days before the date of implementation. The GreTai shall notify the OTC company concerned to make a disclosure on the Internet information reporting system designated by the GreTai within 2 days after receipt of the GreTai notice.
Where trading of securities is suspended under subparagraph 1 of paragraph 1, a public announcement shall be made immediately by the GreTai, on the date it learns of the matter or is notified by the court, or by the OTC company, on the date of disclosure of the material information, on the same day (whichever of the above is earlier), and trading shall be suspended from the next business day following the date of public announcement; and the OTC-listed company shall be notified to make a disclosure on the Internet information reporting system designated by the GreTai within two days from receiving notice from the GreTai. |
| Article 12-2 |
In the event that an issuer has any of the following conditions, the GreTai may report to the Competent Authority for approval to terminate the trading of its securities on the OTC Market:
1. Where the securities have been listed on the Taiwan Stock Exchange Corporation.
2. Where the issuer has been adjudicated bankrupt by a court and such adjudication has become final.
3. Where the court has ruled for re-organization or where the court has dismissed an application for re-organization pursuant to Article 285-1, paragraph 3, subparagraph 2 of the Company Act, and the said ruling/dismissal has become final.
4. Where the most recent individual financial report publicly announced and reported under Article 36 of the Securities and Exchange Act shows a negative net worth; likewise, where a subsequently publicly announced and registered individual financial report shows a negative net worth. If the issuer is a holding company, the term "net worth" means the shareholders' equity minus minority interest as stated on the consolidated financial report. However, an issuer applying for trading its securities on the OTC Market pursuant to paragraph 4 of Article 3 of the Review Rules shall not be subject to the restriction of this provision before the 3rd anniversary of the trading on OTC Market.
5. Where the issuer has a record of refusal by a financial institution to transact with it, or of the circumstances referred to in subparagraph 9 of paragraph 1 of the preceding Article where the company has failed to accomplish remedial procedures as set forth in paragraph 4, subparagraph 3 of Article 12 and submit relevant written documentation. However, if the negotiable instrument is retrieved by means of a settlement within three months of the suspension of trading, an application may be filed with the GreTai for re-calculation of the aforesaid six month period as beginning from a date approved by the GreTai. Such application shall be accompanied by the settlement document, a photocopy of the negotiable instrument, and other relevant materials, and no more than one extension shall be granted.
6. Where there is material change in the company's business scope, and the GreTai decides that continued trading of the securities on the OTC Market is improper; provided, for investment holding companies created as the result of share conversion, general assignment, or assignment of business, this shall not apply; for investment holding companies created as the result of a company demerger, this also shall not apply within the year in which falls the record date of the demerger.
7. Where the company's operation is completely suspended and cannot be reinstated shortly or no business income is generated; provided that this shall not apply in the case of a private enterprise with no business income during the period of undertaking construction of public concession projects.
8. Where there is false statement or omission of material information in the application or the attached documents, and according to the fact ascertained in the ruling of a judicial authority, the issuer has any of the following conditions:
(1) where the financial report, account book, etc. provided by the company upon application for trading its securities on the OTC Market contains false statement or concealment, and after recalculation or deduction of the falsely stated or concealed amount, the profitability does not meet the requirements for trading on the OTC Market; provided that this provision shall not apply if 5 years have elapsed from the date of trading on the OTC Market to the date on which the decision of the judicial authority becomes final; or
(2) where the issuer meets the proviso in the preceding subparagraph but the false statement or concealment still exists when the decision becomes final, and after recalculation or deduction, the profitability of the year in which the decision becomes final does not meet the requirement for trading on the OTC Market.
9. Where the issuer has any of the conditions under Article 9, Article 10, Article 11, paragraph 2 of Article 17, subparagraph 1 through subparagraph 8 of paragraph 1 of Article 315, and Article 397 of the Company Act or other conditions, and its corporate registration is revoked or the company is dissolved by the relevant Competent Authority.
10. Where the issuer has any of the conditions under Article 251 or Article 271 of the Company Act or other conditions, and the approval is revoked by the relevant Competent Authority.
11. Where the issuer has materially violated the contract for trading on the OTC Market.
12. Where trading of securities on the OTC Market has been suspended pursuant to any subparagraph of paragraph 1 of Article 12-1 of these Rules for six months and circumstances in any subparagraph of paragraph 1 of said Article continue to exist; or, where trading of securities on the OTC market is resumed after having been suspended pursuant to subparagraph 1 of paragraph 1 of said article for less than six months, if within six months from the resumption of OTC trading the OTC trading is again suspended pursuant to subparagraph 1 of paragraph 1 of said article, and the aggregate period of suspension of OTC trading exceeds six months.
13. Where the total amount of issued preferred (special) shares traded on the OTC Market is less than that prescribed in paragraph 5 of Article 15 of the Review Rules.
14. Where the most recent annual (or semi-annual) consolidated financial report of the OTC company as audited (or reviewed) by a CPA shows that the ratio of its net equity investments to shareholders' equity is 150% or greater; provided this shall not apply to issuers that applied for OTC listing in the capacity of a financial holding company or investment holding company.
15. Where the annual (semi-annual) financial report of an investment holding company as certified by a CPA shows that the accounting book value in the invested company is not more than 50% of total equity in the invested company, or an investment in excess of 20% of shareholders equity has been made in a listed or OTC-listed company that is not an investment holding company.
16. Where a financial holding company's permit is voided by the Competent Authority.
17. Where the issuer has already become a subsidiary of a domestic listed or OTC-listed company that holds more than 70 percent of its shares.
18. Where, if a financial institution, the issuer has become subject to receivership duly imposed by the Competent Authority in charge of the relevant industry.
19. Where there is any other significant events for which the trading of securities shall be terminated.
Where the GreTai has publicly announced termination of OTC trading of an issuer's securities for reason of circumstances specified in subparagraphs 5 or 12 of the Preceding paragraph but the termination has not yet been implemented, the GreTai may waive the termination, following approval by the Competent Authority, where all of the following conditions are met and no circumstances specified in any other subparagraphs of the preceding paragraph exist, and where the application for such waiver, accompanied by relevant facts and evidence, has been submitted to the GreTai at least eight business days prior to the implementation date:
1. Where, after public announcement of termination of OTC trading for reasons in subparagraph 5 above, remedial procedures as set forth in paragraph 4, subparagraph 3 of Article 12 have been accomplished and relevant written documentation submitted.
2. Where, after public announcement of termination of OTC trading for reasons in subparagraph 12 of the Preceding paragraph, regular financial reports that had not been submitted on time are submitted, or relevant financial reports are corrected or rewritten in compliance with regulations.
An issuer that makes full supplementations or corrections before the implementation date following public announcement of termination of OTC trading of its securities shall be eligible for a waiver of implementation of termination only if such issuer has never previously been granted a waiver of termination of OTC trading based on the same reasons.
Upon the approval of termination of OTC trading of a security by the Competent Authority, the GreTai shall publicly announce the termination 40 days before the implementation date, except in the case of a financial institution subject to the circumstances in subparagraph 18 of paragraph 1, in which case the financial institution shall be subject to the procedures under paragraph 5.
Where a financial institution has become subject to receivership duly imposed by the Competent Authority in charge of the relevant industry, the OTC trading of its securities shall be terminated according to the following procedures:
1. Upon notification from the Competent Authority in charge of the relevant industry, the GreTai will publicly announce that beginning from the next day following the date of announcement the trading of its securities shall be suspended for a period of 10 days and report the event to the Competent Authority for recordation; the GreTai will also submit a report requesting approval from the Competent Authority to terminate the OTC trading of its securities.
2. Upon approval by to the Competent Authority to terminate the OTC trading of the securities, the GreTai will publicly announce that beginning from the next day following the end of the suspension period the trading of the securities will resume, and the termination of their OTC trading will become effective at the end of the ensuing 20-day period.
3. When trading of the securities resumes pursuant to the preceding subparagraph, the securities shall be placed under an altered trading method and the periodic call auction trading method shall be imposed.
Where OTC trading of a security is terminated pursuant to Article 16, paragraph 1, Article 16-1, paragraph 1 or paragraph 2, or Article 16-2, paragraph 1 or paragraph 2 of these Rules or because an OTC company becomes listed [on the Taiwan Stock Exchange], the GreTai shall publicly announce the termination five days before the implementation date.
Where OTC trading is terminated pursuant to subparagraph 17 of paragraph 1 herein, or the security is de-listed pursuant to subparagraph 15 of paragraph 1 of Article 50 of the Operating Rules of the Taiwan Stock Exchange Corporation, the OTC-listed parent company shall undertake to unconditionally purchase all remaining outstanding shares of the listed/OTC company.
Bonds may be exempted from the public announcement date requirements in paragraphs 4 and 6, subject to the approval of the Competent Authority considering their maturity or any other special circumstances
Within two days of receiving notification by the GreTai of termination of OTC trading of its securities, an issuer shall disclose the termination on the Internet information reporting system designated by the GreTai.In the event that an issuer has any of the following conditions, the GreTai may report to the Competent Authority for approval to terminate the trading of its securities on the OTC Market:
1. Where the securities have been listed on the Taiwan Stock Exchange Corporation.
2. Where the issuer has been adjudicated bankrupt by a court and such adjudication has become final.
3. Where the court has ruled for re-organization or where the court has dismissed an application for re-organization pursuant to Article 285-1, paragraph 3, subparagraph 2 of the Company Act, and the said ruling/dismissal has become final.
4. Where the most recent individual financial report publicly announced and reported under Article 36 of the Securities and Exchange Act shows a negative net worth; likewise, where a subsequently publicly announced and registered individual financial report shows a negative net worth. If the issuer is a holding company, the term "net worth" means the shareholders' equity minus minority interest as stated on the consolidated financial report. However, an issuer applying for trading its securities on the OTC Market pursuant to paragraph 4 of Article 3 of the Review Rules shall not be subject to the restriction of this provision before the 3rd anniversary of the trading on OTC Market.
5. Where the issuer has a record of refusal by a financial institution to transact with it, or of the circumstances referred to in subparagraph 9 of paragraph 1 of the preceding Article where the company has failed to accomplish remedial procedures as set forth in paragraph 4, subparagraph 3 of Article 12 and submit relevant written documentation. However, if the negotiable instrument is retrieved by means of a settlement within three months of the suspension of trading, an application may be filed with the GreTai for re-calculation of the aforesaid six month period as beginning from a date approved by the GreTai. Such application shall be accompanied by the settlement document, a photocopy of the negotiable instrument, and other relevant materials, and no more than one extension shall be granted.
6. Where there is material change in the company's business scope, and the GreTai decides that continued trading of the securities on the OTC Market is improper; provided, for investment holding companies created as the result of share conversion, general assignment, or assignment of business, this shall not apply; for investment holding companies created as the result of a company demerger, this also shall not apply within the year in which falls the record date of the demerger.
7. Where the company's operation is completely suspended and cannot be reinstated shortly or no business income is generated; provided that this shall not apply in the case of a private enterprise with no business income during the period of undertaking construction of public concession projects.
8. Where there is false statement or omission of material information in the application or the attached documents, and according to the fact ascertained in the ruling of a judicial authority, the issuer has any of the following conditions:
(1) where the financial report, account book, etc. provided by the company upon application for trading its securities on the OTC Market contains false statement or concealment, and after recalculation or deduction of the falsely stated or concealed amount, the profitability does not meet the requirements for trading on the OTC Market; provided that this provision shall not apply if 5 years have elapsed from the date of trading on the OTC Market to the date on which the decision of the judicial authority becomes final; or
(2) where the issuer meets the proviso in the preceding subparagraph but the false statement or concealment still exists when the decision becomes final, and after recalculation or deduction, the profitability of the year in which the decision becomes final does not meet the requirement for trading on the OTC Market.
9. Where the issuer has any of the conditions under Article 9, Article 10, Article 11, |