| Article 15 |
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| Article 16 |
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| Article 17 |
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| Article 18 |
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| Article 19 |
Where, upon application, a subsidiary, other than a government-owned enterprise, applies for the listing of its stock but is unable to meet the requirements set forth in all the subparagraphs below, the TWSE shall disagree to the listing, notwithstanding the fact that its application meets the criteria set forth in these Rules:
1. A consolidated financial statement of the parent company and all of its subsidiaries which is prepared in accordance with the accounting principles of the home country of its parent company and an audit opinion issued by a CPA in the Republic of China stating the differences between the accounting principles applicable in the Republic of China and the accounting principles applicable in the home country of the parent company and the impact of such differences on such financial statement shall be submitted along with the application.
2. According to the consolidated financial statement submitted pursuant to the preceding paragraph, the total amount of net worth shall be NT$1 billion or more in the most recent fiscal year and the net income before tax shall each represent 3 percent or greater of the total amount of net worth in each of the most recent 2 fiscal years; provided, if the applicant company is applying for listing pursuant to Article 5, Article 6, or Article 6-1, or if the amount of its purchase/sale transactions with its parent company in the year of the application for listing and in the most recent fiscal year is less than 10 percent of its total amount of purchases/sales, it will not be subject to the above-stated profitability ratio.
3. The total number of shares of the applicant company held by the parent company and all of its subsidiaries, and by those companies' directors, supervisors, representatives, and greater than 10 percent shareholders, and by related parties thereof, shall not exceed 70 percent of the total number of its issued shares. If this 70 percent limit is exceeded, the applicant company shall conduct a pre-listing initial public offering to reduce the percentage of shares held by the aforesaid persons to 70 percent or lesser. However, the same does not apply where the applicant company meets the requirements of both of the following subparagraphs:
A. It has established an audit committee or has independent directors numbering more than one-half of the total number of directors.
B. Persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of no less than 300 million shares.
4. The applicant company shall have at least three independent directors.
5. The applicant company's operating revenue derived from its parent company in the fiscal year of the application for listing and in the most recent fiscal year shall not exceed 50 percent of its operating revenue; its principal raw materials or principal products or total amount of purchases [obtained from its parent company] during such periods shall not exceed 70 percent of its purchases. However, this restriction shall not apply where the cause is characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
6. If the stock of the parent company is already traded on the TWSE (or the GTSM), at the time of its application for TWSE listing, the pro forma operating revenue or operating income as stated in the pro forma consolidated financial statements for each of the most recent 4 quarters, excluding the financial data for the applicant company, and reviewed by a CPA, was not down by 50 percent or more from the operating revenue or operating income stated in the consolidated financial statements for the same period, and the parent company has not transferred any material customers or business within the most recent 2 fiscal years. However, this need not apply if the parent company and the subsidiary have different business types, industrial classifications, or product types, and moreover are not mutually competitive, or if it resulted from another reasonable cause.
When a subsidiary applies for TWSE listing pursuant to the proviso of subparagraph 6 of the preceding paragraph, any transfer of shares within the three years prior to the application for TWSE listing for purposes of reducing the parent company's shareholding in the subsidiary shall have been conducted in a manner in which the pre-emptive subscription right is given to the original shareholders of the parent company or another manner not detrimental to the rights and interest of the shareholders of the parent. |
| Article 20 |
An investment holding company applying for listing of its stock may apply only as a professional investment company and only with the purpose of controlling the business operations of other companies, and shall be approved for the listing of its stock if it meets the requirements of the following subparagraphs:
1. Years of incorporation: Three full years have elapsed following registration of incorporation, or the years of actual operation of any of its held companies exceed three years.
2. Equity: The net worth for the most recent fiscal year reaches NT$1 billion or more.
3. Profitability: The ratio of net income before tax to net worth as stated on the financial report for each of the most recent 2 fiscal years reaches 3 percent or higher.
4. Dispersion of share ownership: The standard of Article 4, subparagraph 4 is met.
5. The company does not engage in any business other than investment.
6. The company shall have two or more held companies, and the held companies may not be professional investment companies and may not hold shares of the applicant company.
7. At least 70 percent of the operating income in the financial reports shall come from the held companies.
8. The sum total of the book value of its investment in the held companies shall equal 50 percent or more of each of its equity-method investment and net worth, as stated in the parent company only financial report.
9. The company has not engaged in any borrowing or lending of funds with a non-financial institution.
10. The ratio of net worth to total assets in the financial report for the most recent fiscal year shall reach one-third or more.
A held company shall mean any of the following:
1. An invested company of which an investment holding company directly holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
2. An invested company of which an investment holding company through its subsidiaries indirectly holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
3. An invested company of which an investment holding company directly, and indirectly through its subsidiaries, holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
4. A company of which an investment holding company directly or indirectly elects or appoints more than half of the directors for the board of directors.
If an investment holding company applying for listing of its stock has a net worth for the most recent fiscal year reaching NT$800 million or more, and its held company or companies have successfully developed products or technology that contribute 50 percent of its total operating revenues, and the products or technology have been successfully developed and are marketable, and the central competent authority for the relevant industry has provided an unequivocal opinion stating that such company or companies are technology enterprises or cultural and creative enterprises, it may be exempted from the application of paragraph 1, subparagraphs 1 and 3.
If the held company is required to be a professional investment company because the investment holding company has invested via a third location, it may be exempted from application of the provision of paragraph 1, subparagraph 6 that a held company may not be a professional investment company.
Notwithstanding that an investment holding company applying for the listing of its stock meets the listing criteria set forth in these Rules, the TWSE shall disagree to its listing if the circumstance in Article 9, paragraph 1, subparagraph 8 applies to any of its held companies, and the TWSE may disagree to its listing if any of the circumstances in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, or 12 applies to any of its held companies and the TWSE deems the listing inappropriate.
A held company more than 70 percent of whose shares are held by an investment holding company that is already domestically listed on the TWSE (or GTSM) may not apply for domestic TWSE listing. |
| Article 20-1 |
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