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In view of the recent falls in the prices of several Taiwan depositary receipts (TDR), the Financial Supervisory Commission (FSC) said in October that it would strengthen its administration in the three following areas: application review, use of proceeds, and collaboration with other countries.
In practice, foreign issuers must seek approval from the FSC before issuing TDR. Not only underwriters but legal counsels and CPAs must be engaged to assist and advise on relevant matters and issue their opinions. In particular, foreign issuers must ensure that there is no misrepresentation or omission in their financial statements.
The use of proceeds derived from TDR is tracked on a quarterly basis. A foreign issuer has to upload a quarterly report about the use of proceed derived from TDR offering sponsored by it onto the Market Observation Post System according to the List of Matters Required to Be Handled by Issuers of Listed Securities within 10 days of the end of each quarter. Furthermore, the FSC plans to collaborate with foreign authorities to exchange information on irregular trades since Taiwan has joined the International Organization of Securities Commissions and signed multilateral memorandums of understanding with more than 80 countries and the Taiwan Stock Exchange has signed memorandums of understanding with 16 foreign stock exchanges. Notwithstanding the above, the FSC is aware that excessive intervention from the government may discourage foreign investment; it will be judicious on the supervision of funds.
