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Strengthen Information Disclosure in Securities Markets and Reform and Supervision of Taiwan Depositary Receipt Market by Financial Supervisory Commission
To protect the rights and interests of investors, the Financial Supervisory Commission ("FSC") in 2012 adopted the following measures to strengthen the publicization, transparency and real-time disclosure of financial and business information on companies ("Listed Companies") listed on the Taiwan Stock Exchange ("TSE") or GreTai Securities Market ("OTC"):
1.
Strengthen disclosure of information on related party transactions: The FSC expanded the scope of regulated related party transactions to include transactions in real estate and other assets with related parties where the transaction values reach certain key thresholds. And Listed Companies involved in such transactions shall publicly announce and report the relevant information in accordance with the relevant regulations.
2.
Strengthen disclosure of corporate governance practices: Listed Companies are required to disclose in prospectus and annual reports information on the establishment of compensation committee, performance of corporate social responsibility and performance in the area of good faith management.
3.
Strengthen information disclosure by foreign issuers: A secondary TSE (or OTC) listed company shall, within 10 days after the end of each quarter and upon any change of plan, contact the original lead underwriter or the attesting CPA to issue an evaluation opinion on the reasonableness of the progress made in utilization of the funds and the handling of unused funds. Furthermore, a secondary exchange (or OTC) listed company that sponsors issuance of TDRs shall disclose price-setting method of the current issuance, the premium/discount percentage of the issue price to the underlying stock price, and dividend policy and its implementation status in the prospectus for investors' reference.
Separately, for sound development of the TDR market, the FSC supervised and requested the TSE, OTC and Taiwan Securities Association to finalize a set of improvement measures for supervision of the TDR market (including but not limited to engaging experts to issue professional opinions, strengthening underwriters' evaluation process, adding circumstances under which the listing of shares would be discouraged, strengthening disclosure of information on TDRs and establishing a TDR delisting mechanism).
