| Article 9 |
A securities firm having received approval of qualification as an issuer of call (put) warrants from the competent authority and wishing to apply to the GTSM for GTSM listing of a planned call (put) warrants issue shall apply to the GTSM with an Application for GTSM Listing of Call (Put) Warrants (Attachment 2) filled out in full and with the required documents attached thereto. Following its review and approval of the issuance plan, the GTSM will immediately issue a letter of approval, with a copy to the competent authority, provided that depending on specific conditions such as the applicant's financial or business status, the status of the underlying securities or index, the number of call (put) warrants already listed on the GTSM with identical or similar types of underlying securities, and the distribution of expiration dates, the GTSM may withhold approval, limit the number of warrants to be listed on the GTSM, or impose other conditions.
For GTSM listed warrants, in the event that the outstanding issuance units reach 90 percent or more of the actual total number of issuance units, the securities firm may apply to the GTSM for a follow-on issue of call (put) warrants. The application shall be made within 2 business days from the next business day following the date of the event's occurrence but at least 10 business days before the last trading day for the warrants. The term "actual total number of issuance units," as used above, means the number arrived at by adding the total number of issuance units of the initial issue and the number of issuance units of each subsequent follow-on issue together and then deducting the accumulated number of issuance units cancelled and exercised.
After receiving a GTSM approval letter, with a copy submitted to the competent authority, the securities firm may entrust an underwriter with underwriting of the issue or it may sell the warrants itself, and provide a prospectus to the subscribers. But this provision shall not apply to a follow-on issuance of call (put) warrants.
The directions for information to be published in a public offering prospectus referred to in the preceding paragraph will be promulgated by the GTSM in accordance with Article 13 of the Regulations Governing Applications for Issuance of Call (Put) Warrants by Issuers and shall take force upon review and ratification by the competent authority. |
| Article 12 |
Where any of the following conditions apply, the GTSM may withhold approval for an application by a securities firm for GTSM listing of a projected issue of call (put) warrants:
1.It has made incomplete submission of required application documents, and it has failed to supplement those documents by the deadline prescribed by the GTSM.
2.The particulars of its application do not conform to laws and regulations, or there is any falsehood or concealment in the application.
3.The securities firm or its affiliated company has, during the month preceding application, released any forecast or information relating to the price of the underlying securities or the underlying index of its projected call (put) warrants issue.
4.When the underlying security of the projected issue of warrants is a domestic stock, and the securities firm or its directors, supervisors, managerial officers, employees, or shareholders holding 10 percent or more of its shares, or any other company 10 percent or more of whose shares are held by any of the above, are at the same time a director, supervisor, or managerial officer of, or shareholder with a stake of 10 percent or more in the issuing company of the underlying security(ies) or any of the issuing companies of the basket of underlying GTSM securities. But this provision shall not apply to a follow-on issuance of call (put) warrants.
5.The issuer's financial report for the most recent period, audited and attested, or reviewed, by a CPA does not comply with the standards set forth in Article 4, paragraph 2, subparagraph 1 or 2 of these Rules, except in cases of noncompliance with the standards set forth in Article 4, paragraph 2, subparagraph 1 where the actions set out in Article 5 have been taken.
6.The aggregate amount of the market value and trade prices of the securities firm's currently TWSE listed, GTSM listed, and GTSM contract-based call (put) warrants that have been issued in the ROC and whose period of validity has not yet expired, and call (put) warrants that have been issued in any overseas market and whose period of validity has not yet expired, and the projected issue of call (put) warrants, together with the total amount of the guarantee and the assets provided as security for the offshore call (put) warrants issuing business of its offshore subsidiary, falls under any of the following conditions:
A.Its credit rating is a Taiwan Ratings Corporation Class A rating or above, a Moody's Investors Service Class A rating or above, a Standard & Poor's Corp. Class A rating or above, a Fitch Inc. Class A rating or above, a Fitch Ratings Limited, Taiwan Branch Class A (twn) rating or above, or a Moody's Investors Service Taiwan Class A.tw rating or above, and the aggregate amount exceeds 60 percent of the securities firm's eligible net regulatory capital.
B.Its credit rating is a Taiwan Ratings Corporation Class BBB- rating or above, a Moody's Investors Service Class Baa1, Baa2, or Baa3 rating or above, a Standard & Poor's Corp. Class BBB- rating or above, a Fitch Inc. Class BBB- rating or above, a Fitch Ratings Limited, Taiwan Branch Class BBB- (twn) rating or above, or a Moody's Investors Service Taiwan Class Baa1.tw, Baa2.tw, or Baa3.tw rating or above, and the aggregate amount exceeds 50 percent of the securities firm's eligible net regulatory capital.
C.Its credit rating is a Taiwan Ratings Corporation Class BB+ rating or above, a Moody's Investors Service Class Ba1 rating or above, a Standard & Poor's Corp. Class BB+ rating or above, a Fitch Inc. Class BB+ rating or above, a Fitch Ratings Limited, Taiwan Branch Class BB+ (twn) rating or above, or a Moody's Investors Service Taiwan Class Ba1.tw rating or above, and the aggregate amount exceeds 30 percent of the securities firm's eligible net regulatory capital.
D.Its credit rating is a Taiwan Ratings Corporation Class BB rating or above, a Moody's Investors Service Class Ba2 rating or above, a Standard & Poor's Corp. Class BB rating or above, a Fitch Inc. Class BB rating or above, a Fitch Ratings Limited, Taiwan Branch Class BB (twn) rating or above, or a Moody's Investors Service Taiwan Class a2.tw rating or above, and the aggregate amount exceeds 20 percent of the securities firm's eligible net regulatory capital.
E.Its credit rating is a Taiwan Ratings Corporation Class BB- rating or above, a Moody's Investors Service Class Ba3 rating or above, a Standard & Poor's Corp. Class BB- rating or above, a Fitch Inc. Class BB- rating or above, a Fitch Ratings Limited, Taiwan Branch Class BB- (twn) rating or above, or a Moody's Investors Service Taiwan Class Ba3.tw rating or above, and the aggregate amount exceeds 10 percent of the securities firm's eligible net regulatory capital.
The above-mentioned eligible net regulatory capital shall be calculated based on the method for calculating eligible net regulatory capital set forth in the Regulations Governing Securities Firms.
The foregoing eligible net regulatory capital applies to ROC securities firms. In the case of a foreign institution, it is calculated by (the net worth on the most recent financial reports of its branch(es) within the Republic of China or branch(es) established within the Republic of China by its wholly owned subsidiaries) x (net available funds multiplier).
7.The securities firm is a foreign institution, and at the time of application to issue call (put) warrants, the inward remittance of capital required for a hedge on the issue (the amount remitted to the ROC minus the amount not required for a hedge on the issue) is less than the market value of the underlying securities represented by the non-matured TWSE listed and GTSM listed call (put) warrants (including the current issue) and any GTSM contract-based call (put) warrants traded. Or, it has failed to issue a letter of undertaking stating that the premiums collected for the given issue of warrants will not be remitted out of the ROC until after the expiration of the period of validity of the warrants.
8.There are irregular fluctuations in the price of the underlying security(ies) within the 3 months prior to the date of application, and the GTSM has taken corresponding measures under the Regulations Governing Implementation of the GTSM Monitoring System.
9.There is any other factor arising out the nature of the enterprise or exceptional circumstances that may be deemed to have an adverse effect on the applicant's settlement of the option or the price of the underlying securities.
10.There are any of the circumstances set forth in Article 8, paragraph 1 of these Rules.
When the circumstance set forth in Article 8, paragraph 1, subparagraph 4 applies to an issuer intending to conduct warrant business, apart from the condition that the period of the sanction imposed on the issuer to suspend its business must be expired, if the issuer has shown concrete improvement in the circumstances, and the competent authority has recognized the improvement, or if the issuer fell under the subparagraph 4 circumstance for reasons other than conducting warrant business, the securities firm may be exempted from restriction under the preceding paragraph. |