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These Directions are issued in order to make distinct classifications of industries for companies whose stocks are initially traded on the Taipei Exchange (TPEx), and to satisfy the need for making adjustments in the event of changes in the business of a company after it begins trading on the TPEx.
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Having referred to the Standard Industrial Classification System of the Republic of China published by the Directorate General of Budget, Accounting and Statistics, Executive Yuan, and the Act for the Development of the Cultural and Creative Industries, the TPEx has issued these Directions to classify TPEx listed companies into 30 industry categories, including the food industry, plastic industry, textile industry, electric machinery industry, electrical and cable industry, chemical industry, biotechnology and medical care industry, glass and ceramic industry, iron and steel industry, rubber industry, semiconductor industry, computer and peripheral equipment industry, optoelectronic industry, communications and internet industry, electronic parts and components industry, electronic products distribution industry, information service industry, other electronic industries, building material and construction industry, shipping and transportation industry, tourism and hospitality, financial industry, household, gas and electricity industry, cultural and creative industry, agricultural technology industry, digital and cloud services, green energy and environmental services, and sports and leisure. The TPEx, however, may make additions or changes to the industry categories based on market needs after reporting to and obtaining the approval of the competent authority.
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When the financial reports for the 2 most recent fiscal years of an issuing company applying for an initial trading of its stock on the TPEx meet any of the following conditions, the industry to which the company belongs shall be categorized according to the respective subparagraphs set forth below:
- When the operating revenue derived by the company from any business activity, as shown in its financial reports for the 2 most recent fiscal years, represents 50 percent or more of its overall operating revenue, then for the purpose of trading its stock on the TPEx, it shall belong to the category of industry covering the said business activity.
- When the operating revenue derived by the company from any business activity, as shown in its financial reports for the most recent fiscal year, represents 80 percent or more of its overall operating revenue, then for the purpose of trading its stock on the TPEx, it shall belong to the category of industry covering the said business activity.
- When the industry category of the company cannot be determined in accordance with either subparagraph 1 or 2 above, then for the purpose of trading its stock on the TPEx, it shall be categorized under "other industry".
When an issuing company makes an initial application to be categorized under the biotechnology and medical care industry, or a TPEx listed company applies for an adjustment to be categorized in that industry, if the company's main business activity is biological technology or the production and distribution of biotechnological foods, the company may be categorized under the biotechnology and medical care industry only if approvals from the Ministry of Health and Welfare, Executive Yuan, and other relevant competent authorities have been obtained. When an issuing company makes an initial application to be categorized under the cultural and creative industry or the agricultural technology industry, or a TPEx listed company applies for an adjustment to be categorized under the cultural and creative industry or the agricultural technology industry, the company may be so categorized only if approvals from the Ministry of Culture or Ministry of Agriculture, respectively, and other relevant competent authorities have been obtained.
When an issuing company initially applies for, or a TPEx listed company applies for an adjustment to, its industry classification, when necessary, the TPEx may require the applicant company to submit an assessment opinion issued by its attesting CPAs indicating that the means by which its operating revenue is derived meets the requirements of paragraph 1, subparagraph 1 or 2, and make the adjustment only after examining it and finding it reasonable. However, if the issuing company or the TPEx listed company is an enterprise for which special permission is required, approval documents issued by the competent authority for the applicant's industry shall be filed.
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When determining the applicable industry category for a company applying for initial TPEx trading of its stock in accordance with Point 3 above, the TPEx may take into consideration the functions and purposes of its major products, the loss and profit ratios of its business departments and the proportions in which its assets are allocated to them, and other relevant evidentiary information.
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The TPEx will conduct a periodic review of the industry category of all TPEx listed companies on a yearly basis. For any company which has changed the nature of its business or adjusted its business strategy, its industry category shall be adjusted and publicly announced in accordance with Points 3 and 4 above based on the financial reports for the most recent 2 fiscal years submitted by the company pursuant to Article 36 of the Securities and Exchange Act, and such adjustment of applicable industry category shall be reported to the competent authority for recordation.
A TPEx listed company may file an application with the TPEx to adjust its industry category within 1 month after submitting its annual financial report.
When considering an adjustment to the industry category of a TPEx listed company pursuant to paragraphs 1 and 2 above, even if the operating revenue of its newly added business activities conforms to the criteria for operating revenue in Point 3, no adjustment will be made if the profit of the given business department fails to reach 2 percent of the capital stock in its final accounts for the year in question, based on a calculation using the information of the given business department.
If a TPEx listed company fails to reasonably determine the industry category to which it belongs according to its operating revenue, or it fails to do so for some other special reasons, the TPEx may classify the company into the appropriate industry category.
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These Directions, and any amendments hereto, shall come into effect after approval and/or recordation by the competent authority..
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