The Taiwan Stock Exchange has introduced four major reforms to its regulations for the review of securities listings, including the addition of a provision regarding the listing deadline for initial applications. The new rule allows a maximum extension of one year under specific circumstances to improve the efficiency of listing applications.
In the first quarter of this year, the Taiwan Stock Exchange made multiple revisions to its regulations concerning securities listings. These changes, which apply to issuers, securities underwriters, and others involved in initial listings, include four key updates. First, the new regulation allows for an extension of the listing deadline for initial applicants under certain conditions, with the maximum extension period now up to one year.
Before this revision, if an issuer failed to complete the listing within three months after the effective date of the listing agreement, the listing application would be canceled. However, a request for an extension of up to three months could be made, but this extension could only be granted once, meaning the listing had to occur no later than six months after the agreement became effective.
The revision was made in consideration of situations where an issuer faces legal restrictions from the country of its main operations or the country of registration of key subsidiaries, or significant political and economic factors affect the ability to complete the public sale and listing within the prescribed timeframe. Under these circumstances, the issuer can now apply for an extension, with the maximum listing deadline extended up to one year, providing greater flexibility.
Secondly, the revision aims to improve employee compensation practices and ensure salary transparency. Before submitting the application, the company should review whether its internal employee base meets the requirements set out in Article 14, Section 6 of the Securities and Exchange Act. The application must also include a review of the average monthly salary of the company’s basic employees for the most recent fiscal year. If the average salary does not meet 1.3 times the minimum wage set by the Ministry of Labor, the company must explain the reasons and provide specific improvement measures.
Third, the extra regulations for the "Information Software Industry" seeking to list have been removed. Previously, companies in the information software industry faced additional requirements regarding securities custody, public offering document content, securities underwriting procedures, and evaluation reports. Furthermore, companies in the information software industry that were not applying for a listing under the technology industry had to meet profitability requirements like other industries. However, knowledge-intensive industries, such as IC design and IP licensing, were not subject to these additional requirements. To align with national policies aimed at promoting the development of the information software industry and its digital transformation, the Taiwan Stock Exchange has removed the special listing requirements for this sector.
Fourth, the review period for assessing the integrity of domestic companies applying for a general listing has been shortened to three years. The previous regulation considered the last five years for evaluating compliance with the integrity principle. However, in 2004, in an effort to lower the listing threshold and encourage more companies to enter the capital market, the minimum establishment period for companies applying to list was reduced from five years to three years. To align the establishment period with the integrity principle review period, the integrity review period has now been shortened to three years.
Resource: 上市審查法規 四變革
