The Taiwan Securities Association (TSA) promulgated a new regulation under Paragraph 4, Article 24 of the Regulations Governing Underwriting or Re-Sale of Securities by Underwriters, which requires a lead underwriter to provide the TSA with an evaluation report stating any irregularities in the stock prices of the underlying shares of Taiwan Depositary Receipts (TDRs). Such evaluation report must contain evaluation for the three-month period prior to the date of initial public offering of TDRs that the lead underwriter reported to the TSA. The purpose of this new regulation is to avoid any adverse impact on investors in Taiwan from irregularities in the stock prices of the underlying shares of TDRs before book building.

In this regard, the TSA also promulgated a new provision under Paragraph 3, Article 48 of the Self-Regulations Governing Offering and Issuance of Securities by Issuers Advised by Underwriters. This provision requires an underwriter to suspend book building if there is any irregularity in the stock prices of the underlying shares of TDRs during the three-month period prior to the date of initial public offering of TDRs that the underwriter reported to the TSA.

Furthermore, an underwriter must submit to the Taiwan Stock Exchange (TWSE), the GreTai Securities Market (GTMS) and the TSA, with a carbon copy to the Securities and Futures Bureau, an evaluation report stating any irregularities in the stock prices of the underlying shares of TDRs during the period from the respective dates on which the underwriter files applications to the TWSE, GTSM and TSA, respectively, to the date prior to the pricing date of TDRs.

Whether there is any irregularity in stock prices must be determined in accordance with the TWSE's Principles for Publishing or Notifying Trading Information and Operating Procedure.