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Chapter I General Principles
Article 1     These Procedures are adopted pursuant to Article 2 of the Contract for TPEx Trading of Securities, Article 2 of the Contract for TPEx Trading of Managed Stock, Article 2 of the Contract for TPEx Primary Listing of Stock of a Foreign Issuer, Article 2 of the Contract for TPEx Secondary Listing of Stock of a Foreign Issuer, and Article 2 of the Contract for TPEx Trading of Taiwan Depositary Receipts signed between the Taipei Exchange (TPEx) and TPEx listed companies.
    These Procedures do not apply to companies with TPEx listed securities that issue only straight corporate bonds, financial bonds or debentures, convertible corporate bonds, exchangeable corporate bonds, or corporate bonds with warrants.
    These Procedures are specially adopted to ensure that TPEx listed companies, TPEx primary listed companies, and TPEx secondary listed companies, upon the occurrence of any event having a material impact on shareholder equity or securities prices, shall immediately publicly disclose the relevant information.
Article 2     The meanings of "parent" and "subsidiary" as used in these Procedures shall be determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
    The term "major subsidiary" as used in these Procedures means a subsidiary that meets the conditions set out in Article 2-1, paragraph 2 of the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants.
    The term "net worth" as used in these Procedures means the equity attributable to owners of the parent shown in the balance sheet prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
    The term "halt of trading" as used in these Procedures means the TPEx, on its own initiative or upon application by the TPEx listed company, suspends the trading of the company's TPEx listed securities during a specific period, pending the public disclosure and explanation by the company of relevant information under these Procedures.
    The term "resumption of trading" as used in these Procedures means the TPEx, on its own initiative or upon application by the TPEx listed company, resumes the trading of the company's TPEx listed securities.
Article 3     To ensure the accuracy of and general access to information, a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company shall not disclose any information to the public before publicly disclosing the relevant material information pursuant to these Procedures.
    Material information published by a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company shall describe in detail the facts of the event, the cause, the effect on company finances and business, the estimated monetary amount affected, and the corresponding measures. The required content shall be published in the TPEx filing format.
     When convening a press conference concerning material information, a representative of a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company shall give a detailed statement pursuant to the preceding paragraph, and shall prepare relevant written materials.
    The filing time limits for publishing material information and convening a press conference concerning material information by a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company shall be as set out in Article 6 and Article 12 of these Procedures.
     If there is any material change in the development of subsequent events with respect to material information that has already been published by a TPEx listed, TPEx primary listed, or TPEx secondary listed company, the company shall immediately update or supplement the content of the relevant information in accordance with the provisions under which the information originally was filed.
Chapter II Material Information
Article 4     The term "material information of a TPEx listed company" means the following matters:
  1. Dishonor of a negotiable instrument due to insufficient deposits and notation of settlement subsequent to dishonor of a negotiable instrument, refusal of a financial institution to honor a transaction, inability to redeem a bond upon maturity or upon the request of the creditor, other loss of credit of a TPEx listed company or a responsible person, parent company, or subsidiary thereof, or a significant change in shareholding of the parent company, or, after dishonor of a negotiable instrument of a TPEx listed company due to insufficient deposits or refusal of a financial institution to honor a transaction of a TPEx listed company, any alteration of trading method, suspension of trading, or delisting of the stock thereof, and the status of any application to restore the original conditions.
  2. Any material effect on company finances or business resulting from any litigious or non-litigious matter, administrative disposition, contentious administrative procedure, provisional attachment, provisional injunction, or compulsory execution, with respect to a TPEx listed company or a responsible person thereof; or violation of the provisions of the Securities and Exchange Act, the Futures Trading Act, the Company Act, the Banking Act, the Insurance Act, the Act Governing Bills Finance Business, the Financial Holding Company Act, or the Business Accounting Act by, or indictment for a crime of corruption, malfeasance in office, fraud, breach of trust, or misappropriation against, the Chairperson or a managerial officer of the company.
  3. Any effect on company operations resulting from a serious decrease in production or a complete or partial suspension of work, leasing out the company's plant or principal equipment, or a pledge or mortgage of all or a principal portion of a company's assets.
  4. Any event set forth in Article 185, paragraph 1 of the Company Act.
  5. Reorganization or bankruptcy procedure of a TPEx listed company or parent or subsidiary thereof, and any and all events occurring in the course of such procedure, including any petition made to a court and any notice given or ruling handed down by a court, or any ruling prohibiting transfer of shares or any precautionary measure ordered by a court under relevant laws such as the Company Act or the Bankruptcy Act, or any material change in any of the above matters.
  6. Appointment (or election) of or change in chairman, general manager, a juristic-person director or supervisor or representative thereof, an independent director, a natural-person director or supervisor, or a member of the functional committee established pursuant to the Securities and Exchange Act, or change in one-third or more of directors, departure of all independent directors from office, or where in the case of a TPEx primary listed company there is no independent director with a registered household address in the Republic of China (ROC).
  7. Change of certified public accountant (CPA) for any reason other than internal adjustments within the attesting accounting firm.
  8. Any change in company personnel, including company spokesperson, acting spokesperson, important operations officer (e.g., chief executive officer, chief operations officer, chief marketing officer, or chief strategy officer, and any positions of equivalent rank) financial officer, accounting officer, research and development officer, or internal audit officer, or, in the case of a TPEx primary listed company, the litigious and non-litigious agent.
  9. Change in accounting year, or any accounting change resolved upon by the board of directors that is required to be submitted for the competent authority's approval and publicly announced and filed in accordance with the applicable regulations governing the preparation of financial reports adopted by the competent authority for the relevant industry, or any non-approval by the competent authority of any application made to the competent authority for an accounting change.
  10. Any material effect on company finances or business resulting from any signing, amendment, termination, or rescission of an important memorandum of understanding, a plan for a strategic alliance or other business cooperation, mutual non-competition commitment, or an important contract, change in any material respect of a business plan, completion of development of a new product, or successful development and formal entry into the mass production stage of a test product, or any major progress on the development of a new product or new technology.
  11. Resolution by the board of directors to carry out a capital reduction, merger or consolidation, demerger, acquisition, exchange, conversion, or transfer of shares, dissolution, issue of new stock for capital increase, record date of capital reduction or cash capital increase, issue of corporate bonds, issue of employee stock option certificates, issue of restricted stock for employees, issue of other securities, private placement of securities, change of par value per share, participation in the establishment of or conversion into a financial holding company, investment holding company, or subsidiary thereof, or any material change in any of the above matters; failure by companies participating in a merger, consolidation, demerger, acquisition, or transfer of shares from another, to convene on the same day and pass resolutions by their boards of directors or shareholders meetings, or inability for any reason to convene a subsequent shareholders meeting of a company participating in a merger, consolidation, demerger, acquisition, or transfer of shares from others, or veto by either side of the proposal for merger, consolidation, demerger, acquisition, or transfer of shares from others; or resolution of the board of directors to cancel a merger or consolidation during the implementation of the merger or consolidation plan following the initial board resolution in favor of the merger or consolidation.
  12. The date, time, and place for and the relevant financial and business information about a press conference, institutional investor conference, or other means by which the company issues public disclosure about financial and business information that has not been entered into the Market Observation Post System (MOPS), by a company.
  13. Resolution by the board of directors to publish financial forecast information, inapplicability of such financial forecast information, or correction or updating of such financial forecast information, or a difference arising from any of the following circumstances, by a company that has published financial forecasts, is 20 percent or more, and the sum involved reaches NT$30 million and 0.5 percent of paid-in capital:
    1. The difference between the self-assessed (unaudited) comprehensive income as publicly disclosed and filed within 1 month after the close of the fiscal year and the forecasted comprehensive income as most recently publicly disclosed and filed.
    2. The difference between the actual comprehensive income stated in the publicly disclosed and filed annual financial report and the forecasted comprehensive income.
    3. The difference between the actual comprehensive income stated in the publicly disclosed and filed annual financial report and the self-assessed (unaudited) comprehensive income as publicly disclosed and filed within 1 month after the close of the fiscal year.
    In the case of shares having no par value or a par value other than NT$10, for the calculation of the aforesaid 0.5 percent of paid-in capital under the forepart of this paragraph, 0.25 percent of net worth shall be substituted.
  14. Resolution by the board of directors to distribute or not to distribute dividends or a change in dividend distributions by a resolution of the board of directors or a shareholders meeting, or resolution of a record date for dividend distribution, or change of date of distribution of cash dividends after an ex-dividend announcement, or failure to distribute cash dividends by the date set for distribution of the cash dividends .
  15. Resolution by the board of directors or a shareholders meeting to directly or indirectly carry out an investment plan of an amount not less than 20 percent of the company's paid-in capital and NT$100 million, or any material change in any of the above matters. In the case of shares having no par value or a par value other than NT$10, for the calculation of the aforesaid 20 percent of paid-in capital, 10 percent of net worth shall be substituted.
  16. A change by resolution of the board of directors in a plan for capital increase by cash or offering of corporate bonds after such plan has become effective upon registration, or such change in a plan for private placement of securities after passage by the board of directors or a shareholders meeting.
  17. Resolution of the board of directors on the date for convening a regular shareholders meeting or special shareholders meeting, the cause or subjects of such a meeting, or the date of suspension of changes to entries in the shareholders' register.
  18. Important resolution of a regular shareholders meeting or special shareholders meeting.
  19. Occurrence of a significant event of internal control-related fraud, non arms-length transaction, or defalcation of company assets.
  20. Where any of the following provisions is met:
    1. A TPEx listed company, or a subsidiary whose shares have not been publicly issued domestically, acquires or disposes of assets within the scope of Article 3 of the Regulations Governing Acquisition or Disposal of Assets by Public Companies adopted by the Competent Authority, and under the circumstances of Article 30 or 31 of those Regulations that require public disclosure and filing, provided that this condition will not apply to the following:
      1. The company has carried out a merger, consolidation, demerger, acquisition, or transfer of shares from another pursuant to subparagraph 11 of this paragraph.
      2. The company has publicly announced the acquisition or disposal of privately placed securities pursuant to subparagraph 24 of this paragraph.
      3. The information is information on derivatives trading that is to be filed by the 10th of each month.
      4. The assets acquired or disposed of are open-ended funds of any kind.
    2. Where any unrealized losses on derivatives trading by a TPEx listed company amount to 3 percent or more of its net worth.
  21. Resolution by the board of directors (or a shareholders meeting) to permit a managerial officer (or a director) to engage in competitive conduct, or knowledge by a company that a managerial officer is operating business of the same kind independently or on behalf of another, or that a director is engaging in an activity within the company's scope of business independently or on behalf of another, where the investment or business activity that the managerial officer or director engaged in is a Mainland-area enterprise, and where there has been any failure to duly obtain permission from the board of directors (or a shareholders meeting), or any material change in any of the above matters.
  22. Any endorsements or guarantees that the TPEx listed company is required to publicly disclose and file under Article 25 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.
  23. Any monetary loans to other persons that the TPEx listed company is required to publicly disclose and file under Article 22 of the Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies.
  24. Acquisition or disposal of privately placed securities by a TPEx listed company or a subsidiary thereof.
  25. Suspension of business transactions between a TPEx listed company and a principal purchaser or supplier, where such purchaser or supplier accounted for 10 percent or more of the company's total amount of sales or purchases as stated in the parent company only (or individual) financial report for the most recent fiscal year.
  26. Occurrence of a disaster, group protest, strike, environmental pollution event, or any other material event, leading to any of the following situations:
    1. where the company incurs a material loss;
    2. where a relevant authority orders suspension of work, suspension of business, termination of business, or revokes or voids a permit related to the pollution;
    3. where administrative fines cumulatively reach NT$1 million or more for a single event.
  27. Finalization of negotiation results of a negotiation meeting called between the company and a creditor bank.
  28. Dishonor of a negotiable instrument, filing for bankruptcy or reorganization, or any other similar circumstance, with respect to a related party of a company, or to a principal debtor of the company or a joint and several guarantor of a principal debtor; or inability by a principal debtor, in favor of whom the company has made an endorsement or guarantee, to settle a matured negotiable instrument, loan, or other obligation.
  29. Any re-filing and public disclosure of the regular annually filed internal control system statement of a TPEx listed company due to any change in the content thereof; or obtaining of the Internal Control Special Audit Report for a special audit of internal controls conducted by a CPA.
  30. Failure by a TPEx listed company to make a public disclosure or a regulatory filing within a prescribed time limit; an error or omission in a financial report prepared by a TPEx listed company, with respect to which Article 6 of the Enforcement Rules to the Securities and Exchange Act requires a correction to and further a restatement of the financial report; a CPA issues an audit report containing an opinion other than an unqualified opinion, or a review report containing an opinion other than an unqualified or modified unqualified opinion, on a publicly disclosed and filed financial report, except in cases where the CPA issues a qualified audit or review report for the reason of annual amortization of losses, as permitted by a law or regulation, or for the reason that the amount of investment by a non-major subsidiary or of investment accounted for using the equity method, and the gain or loss thereupon, as presented in the interim financial report is calculated on the basis of the investee company's financial report that have not been audited or reviewed by a CPA. However, if the above-mentioned non-major subsidiary is a subsidiary of a financial holding company, the subsidiary's interim financial report shall be audited or reviewed by a CPA in accordance with applicable laws and regulations.
  31. (Deleted)
  32. Insufficient centralized custody ratio after a TPEx listed company has placed stocks in centralized custody pursuant to regulations and prior to expiry of the custody period, as the result of withdrawal of any such stock, due to a court execution order or some other reason.
  33. Occurrence of any of the changes in shareholding set forth in Article 369-8, paragraphs 1 and 2 of Taiwan's Company Act and receipt of notice of the same.
  34. A provisional injunction ruling or emergency disposition suspending one of the directors or supervisors from the exercise of powers, or a provisional injunction ruling or emergency disposition suspending a director from the exercise of powers, making it impossible for the board of directors to exercise its powers.
  35. Any matter required to be publicly disclosed and filed by the Regulations Governing Share Repurchase by TWSE Listed and TPEx Listed Companies.
  36. Occurrence of any of the following matters to the TPEx listed company due to capital reduction or change of par value per share:
    1. Completion of capital amendment registration.
    2. Passage of a plan for share replacement operations.
    3. Any subsequent failure to execute such share replacement plan.
    4. At the time of announcement of the financial report, the listing procedures for the new shares replacing the old ones due to the capital reduction or change of par value per share have yet to be completed, resulting in a discrepancy between the number of common shares used as the calculation basis for net worth per share in the financial statement and the number of outstanding shares.
    5. If the TPEx listed company is required to carry out share replacement operations due to a capital reduction, and the transferee company of the demerger is neither a TWSE listed nor a TPEx listed company, then 3 business days before the date on which trading resumes, public disclosure and filing shall be made of the following information for the demerged company and the transferee company of the demerger for the day prior to the record date of the demerger: the unaudited or CPA-reviewed share capital, net worth, and net worth per share, and the CPA-attested (or reviewed) earnings per share for the most recent period.
  37. Issuance of an undertaking by a company applying for TPEx listing for the first time and subsequent inability to perform the undertaking; failure to carry out remedial procedures within 3 months after the day of the aforesaid occurrence.
  38. Any matter required to be publicly disclosed and filed pursuant to the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company.
  39. A financial holding company or a TPEx listed company that is a banking enterprise, securities enterprise, futures enterprise, or insurance enterprise as defined in Article 2 of the Organic Act Governing the Establishment of the Financial Supervisory Commission has had its authorization revoked by the competent authority or has had disciplinary measures imposed by the competent authority for violation of relevant provisions of the Financial Holding Company Act, Banking Act, Insurance Act, Act Governing Bills Finance Business, or securities or futures-related regulations, or administrative fines cumulatively reaching NT$1 million or more for a single event, provided that this rule does not apply if the disciplinary action is a corrective action or requirement of improvement within a prescribed period of time, which does not materially affect the company's finances or business.
  40. Any of the circumstances set out in Article 12-1, paragraph 1, subparagraph 17 of the TPEx Rules Governing Securities Trading on the TPEx, and the TPEx has announced suspension of trading of the company's TPEx listed securities, or the TPex has announced the halt or resumption of trading of the company's TPEx listed securities according to these Procedures.
  41. Increase or decrease in the number of companies held by an investment holding company.
  42. Resolution by the board of directors or a shareholders meeting of a TPEx listed company to apply for termination of TPEx trading of its securities, or any material change in such a matter.
  43. Procedures for a donation to a related party or a major donation to a non-related party pursuant to the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.
  44. Any expression of objection or reservation, by a member of the audit committee or the Remuneration Committee about a resolution by such committee meeting, or by an independent director about a resolution by the board of directors, of which there is a record or a written statement; if the TPEx listed company has established an audit committee, any matter that is adopted with the approval of two-thirds or more of all directors without having been passed by the audit committee; any remuneration passed by the board of directors that is more favorable than that recommended by the Remuneration Committee.
  45. Forfeiture by the directors and supervisors as a whole of subscription rights to shares in a number reaching one-half or more of subscribable shares upon cash capital increase of a TPEx listed company, and opening of the shares for subscription by a specific person or persons through negotiation.
  46. Where a TPEx listed company holds more than 70 percent of the total issued shares or total share capital of a TWSE listed (or TPEx listed) subsidiary thereof; or where 70 percent of the total issued shares or total share capital of a TPEx listed company is held by another TWSE listed (or TPEx listed) company.
  47. Withdrawal by a TPEx listed company on its own initiative for any reason an application it has submitted for conversion of its stock to listed trading.
  48. If a TPEx listed company issues securities overseas, the making of any adjustment for differences in the overseas financial report due to inconsistency in the accounting principles applied in the two places with respect to financial information filed for any period in the place of overseas listing; or if the financial report of a TPEx primary listed company is not prepared according to the generally accepted accounting principles (GAAP) endorsed by the competent authority, the differences in items between the accounting principles employed and the GAAP and the monetary amounts affected thereby, and the attesting CPA's opinions on the above-mentioned items.
  49. Any of the circumstances set out in Article 15-26 of the TPEx Rules Governing Securities Trading on the TPEx.
  50. The TPEx listed company has failed to prepare the annual report in accordance with the provisions of the Regulations Governing Information to be Published in Annual Reports of Public Companies, and has been requested by a letter of the TPEx to make supplementations or corrections.
  51. Any other major policy resolution of the board of directors or other matter having a material effect on the shareholders' equity or securities prices of a TPEx listed company.
    If dishonor of negotiable instruments due to insufficient deposits referred to in subparagraph 1 of the preceding paragraph has occurred, the date of dishonor, number, monetary amount, and correspondent bank(s) of any dishonored negotiable instrument(s) not yet notated as settled as of the end of the preceding month, cash budget statement for the current month, and status of execution of the cash budget statement for the preceding month shall be input by the tenth day of each month until remediation has been carried out. If there is inability to redeem an issued matured bond, the monetary amount and quantity unredeemed and status of negotiations with creditors as of the end of the preceding month, cash budget statement for the current month, and status of execution of the cash budget statement for the preceding month shall be input by the tenth day of each month until redemption has been completed in full.
    With respect to a resolution by the board of directors to carry out a merger or consolidation, demerger, acquisition, or transfer of shares as referred to in paragraph 1, subparagraph 11, if the counterparty is a foreign company, the TPEx listed company shall promptly, completely, and accurately input information related to the resolution for, process of, and method of the merger or consolidation, acquisition, or transfer of shares, of the foreign business.
    Under the circumstances in paragraph 1, subparagraph 32, the TPEx listed company shall, by the day next following the expiry of the time limit of which the company is notified by letter of the TPEx for replacing shares withdrawn from custody, input the amount of shares replaced and date of replacement.
     The provisions of this Article that are applicable to TPEx listed companies shall apply mutatis mutandis to TPEx primary listed companies.
Article 5     The term "material information of a TPEx secondary listed company" means the following matters:
  1. Any circumstance set out in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act.
  2. Any material information the TPEx secondary listed company is required to file simultaneously under the laws, regulations, and rules of the home country or country of listing.
  3. Any circumstance in regard to the TPEx secondary listed company set out in Article 12-6 of the TPEx Operating Rules.
  4. A change in the TPEx secondary listed company's articles of incorporation or an increase or decrease in its capital.
  5. Any issuance, maturity, or repurchase of preferred shares or corporate bonds of the TPEx secondary listed company, or with respect to corporate bonds convertible to shares, any allotment of shares in accordance with company rules.
  6. A change in the principal business activity, the custodian institution, or the depository institution in the ROC, of the TPEx secondary listed company.
  7. Any pledge, lease, sale, or retirement of major operating assets of the TPEx secondary listed company.
  8. A reduction or discontinuation of production of some or all products by the TPEx secondary listed company due to a major disaster.
  9. The pendency or conclusion of a material litigation case or tax disposition case involving the TPEx secondary listed company or its authorized agent institution, depository institution, or custodian institution in the ROC, or the commencement of lawful reorganization, bankruptcy, or liquidation proceedings by the TPEx secondary listed company.
  10. Occurrence of any circumstance under subparagraphs 6 through 9 of this paragraph to a subsidiary in which the TPEx secondary listed company holds shares of more than 50 percent or an affiliated subsidiary at any level under and controlled, directly or indirectly, by the TPEx secondary listed company, that has a material effect on its finances or business.
  11. Conduct by a promoter or director of the TPEx secondary listed company that, under the law of its home country, results in joint and several liability for damages together with the TPEx secondary listed company.
  12. A decision by a court of the TPEx secondary listed company's home country that lawfully voids or declares invalid a shareholders meeting resolution of the TPEx secondary listed company.
  13. A change in the laws, regulations, or rules of the TPEx secondary listed company's home country that materially affects shareholders' equity or corporate operations.
  14. A resolution by the board of directors of the TPEx secondary listed company to carry out a merger or consolidation, or demerger, or acquisition, or exchange or transfer of shares to or from another, or dissolution, or any material change in any of the above matters; failure for any reason by a company participating in a merger or consolidation, demerger, acquisition, or transfer of shares from another, to convene a subsequent shareholders meeting, or veto by either side of such a proposal; a resolution of the board of directors to cancel a merger or consolidation during the implementation of the merger or consolidation plan following the initial board resolution in favor of the merger or consolidation; or a resolution by the board of directors of the TPEx secondary listed company to carry out a demerger or distribution of dividends, causing the holders of its issued TDRs to acquire shares of another company for free.
  15. The TPEx traded foreign stock or TDRs are reported lost, subject to a judgment of exclusion, or subject to attachment or provisional attachment by order of a court, or their holder is declared bankrupt by ruling of a court, which is sufficient to affect the market situation of the relevant TPEx traded securities.
  16. A change in the rating assigned to the TPEx secondary listed company or its issued securities by a credit rating agency.
  17. A change in, or a change in the plan for, a private placement of securities by the TPEx secondary listed company.
  18. A report in the domestic or foreign mass media or any information provided by any investor sufficient to affect the market situation of the relevant TPEx traded foreign stock, TDRs, foreign straight bonds, foreign convertible corporate bonds, or foreign corporate bonds with warrants.
  19. Any change in chairperson, general manager, juristic-person director or supervisor, independent director, financial or accounting officer, internal audit officer, attesting CPA, CPA for secondary review, or agent for litigious and non-litigious matters, of the TPEx secondary listed company.
  20. Termination on its own initiative or otherwise failure by a certified public account of the TPEx secondary listed company to carry out the audit and attest work on the company's financial reports.
  21. Any amendment to the depositary agreement signed between the TPEx secondary listed company and the depository institution that has a material effect on shareholders' equity.
  22. The TPEx secondary listed company resolves to repurchase TDRs, the repurchase period expires or the repurchase is completely executed, or the repurchased TDRs have cumulatively reached 2 percent of the total number of the already issued TDRs or the number of outstanding units does not exceed 6 million units.
  23. The date for, and the relevant financial and business information in connection with, the convening of any press conference, institutional investor conference, or public disclosure by any other means of financial and business information that has not yet been entered into the MOPS, by a TPEx secondary listed company.
  24. Inability by the TPEx secondary listed company to punctually pay for foreign straight bonds, foreign convertible corporate bonds, or foreign corporate bonds with warrants that have matured or that creditors have requested it to redeem.
  25. Failure by the TPEx secondary listed company to file the financial report by the deadline under the regulations of the original place of listing.
  26. Publication of information by the TPEx secondary listed company on its own initiative that has a material effect on shareholders' equity or securities price.
    Documents or materials submitted by a TPEx secondary listed company to a securities supervisory authority or securities exchange of the country of its original listing shall simultaneously be submitted to the TPEx.
     A TPEx secondary listed company may engage its agent in the ROC to conduct the filing of material information with the TPEx via the Internet.
     A TPEx secondary listed company to which the circumstance set out in paragraph 1, subparagraph 24 applies shall, by the tenth day of each month, input the monetary amount and quantity unredeemed and the status of negotiations with creditors as of the end of the preceding month, the cash budget statement for the current month, and the status of execution of the cash budget statement for the preceding month, until redemption has been completed in full.
Article 6     A TPEx listed company or TPEx primary listed company shall input the content or explanations of the material information into the information filing website designated by the TPEx within the filing time limits set forth in the following subparagraphs:
  1. When any circumstance set forth in the subparagraphs of Article 4, paragraph 1 exists, the material information shall be input 2 hours before the commencement of trading hours of the trading day next following the date of occurrence of the event, with the exception of subparagraph 40, for which the material information shall be input within 1 hour after receiving notice from the TPEx. However, if a press release is issued earlier, the information shall be input simultaneously.
  2. If the TPEx listed company or TPEx primary listed company discovers mass media reportage of any circumstance set forth in the subparagraphs of Article 4, paragraph 1 or reportage sufficient to affect the market price of its listed securities, or any reportage that diverges from facts, the company shall immediately input the explanation of the material information no later than 2 hours after the discovery.
  3. When any circumstance set forth in the subparagraphs of Article 11, paragraph 1 exists, the company shall input the content of such event on the date of occurrence of the event or the same day as the media reportage, and no later than 2 hour after the press conference, except for the circumstance set forth in paragraph 1, subparagraph 7 of that article, in which cases the company shall input the content of such event at the time of convening the press conference or within 2 hours after the conference.
    The date of occurrence of the event referred to in subparagraph 1 of the preceding paragraph means the date of agreement, date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of a resolution of the board of directors or a committee established thereby, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; however, for any investment requiring the approval of the competent authority, the earliest of the above dates or the date of receipt of approval from the competent authority shall apply.
    The filing time limits in the subparagraphs of paragraph 1 shall be based on Taiwan time, and the filing shall be made in Chinese, provided that the filing may also be simultaneously disclosed in English. In addition, where foreign laws or regulations impose time constraints concerning material information that a TPEx listed company or TPEx primary listed company is required to file on behalf of a foreign enterprise under these Procedures, it may accommodate the time constraints on the foreign enterprise and make the disclosure simultaneously therewith. A TPEx primary listed company may hire a litigious and non-litigious agent to handle the filing of material information.
    Where a TPEx listed company or a TPEx primary listed company has issued securities outside of Taiwan, if any circumstance set out in Article 4, paragraph 1 applies to the company during the duration of those securities, the company shall simultaneously input the content or explanations of the information in English into the TPEx-designated information filing website. Also, if it experiences any material event that requires immediate filing under the government laws and regulations of the country where the securities are listed or the company is registered, or other securities exchange market rules, it shall simultaneously input such information into the TPEx-designated information filing website, and if it receives any written enquiry from a securities regulatory agency or securities exchange of the country where the securities are listed or the company is registered with respect to any matter that has a material effect on shareholders' equity or the price of securities, it shall immediately forward a copy of the content of the written enquiry and any response thereto to the TPEx.
    A TPEx secondary listed company to which any circumstance in Article 5 applies shall file a regulatory report within the time limits set forth in paragraphs 1 to 4, except that a circumstance under Article 5, paragraph 1, subparagraph 18 shall be handled by no later than the date of discovery of the circumstance, and as promptly as possible within the time period permitted for the filing of material information under the laws or regulations of the secondary listed company's home country or country of listing.
    If a circumstance under the preceding paragraph falls within the scope of the laws and regulations of its home country or country of listing, the TPEx secondary listed company shall, within the time limit required by such laws and regulations, simultaneously enter the content or explanation of the information in the Chinese language into the TPEx-designated information filing website.
    When a TPEx secondary listed company receives a written enquiry from a securities regulatory agency or securities exchange of its home country or country of listing with respect to any matter that has a material effect on its shareholders' equity or securities price, it shall simultaneously forward a copy of the content of the written enquiry and any response thereto to the TPEx.
Article 7      When any circumstance set forth in the subparagraphs of Article 4, paragraph 1 requires filing by a subsidiary, the TPEx listed company shall file on behalf of any of its subsidiaries that is non-TWSE listed, non-TPEx listed, and has not registered its stock as emerging stock.
     When any of the circumstances under Article 4, paragraph 1 applies to a TPEx listed company's major subsidiary that is non-TWSE listed, non-TPEx listed, and has not registered its stock as emerging stock, it shall be deemed material information of the TPEx listed company, and shall be filed by the TPEx listed company on behalf of the major subsidiary.
    If the TPEx listed company is an investment holding company or financial holding company, in addition to filing material information on behalf of its major subsidiaries, it shall duly file material information of the following subsidiaries on their behalf:
  1. The subsidiary is a non-TWSE-listed, non-TPEx-listed, and non-emerging stock company that is held by an investment holding company, and its net worth accounts for 2 percent or more of the net worth of the investment holding company stated in the financial report for the most recent fiscal year.
  2. The terms "bank," "insurance," "securities," "futures," or "bills" occurs in the name of the financial holding company's subsidiary, or the subsidiary's net worth accounts for 2 percent or more of the net worth of the financial holding company stated in the financial report for the most recent fiscal year.
    When the combined dollar amount of investment by the TPEx listed company and its subsidiaries in any single enterprise exceeds 10 percent of the net worth of the TPEx listed company, if that invested single enterprise is not a domestic public company, and there occurs any event under Article 7, subparagraphs 1 to 8 of the Securities and Exchange Act Enforcement Rules, the TPEx listed company shall file on the enterprise's behalf 2 hours before the opening of trading hours on the business day next following the day it learns of the occurrence of an aforesaid event or of the media reportage of the event.
    If a TPEx listed company is a subsidiary in a parent-subsidiary relationship, and any of the circumstances under Article 2, paragraph 1 applies to the parent when the parent is a non-TWSE-listed, non-TPEx-listed, and non-emerging stock company, it shall be deemed material information of the TPEx listed company. If the parent company is a foreign company, the TPEx listed subsidiary shall file on its behalf any of the particulars set forth in the following subparagraphs 2 hours before the opening of trading hours on the business day following the day it learns of the occurrence or on which the media report the event with respect to the parent company:
  1. Material change in shareholder equity.
  2. Material change in business operation policy.
  3. Significant disaster resulting in serious reduction or complete cessation of production.
  4. Substantial effect on shareholders' equity or company operations resulting from a change in laws, regulations, or rules of the home country.
  5. Mass media reportage about the parent company sufficient to affect securities prices of a TWSE listed or TPEx listed company in Taiwan.
  6. Occurrence of any other material event that is required to be immediately filed pursuant to law or regulation of the foreign company's home country.
Article 8     A TPEx listed company or a TPEx primary listed company shall comply with the following particulars in connection with an institutional investor conference or press conference:
  1. Except under one of the following circumstances, the company may not hold or attend a conference during TPEx trading hours:
    1. An overseas institutional investor conference or press conference is held during TPEx trading hours as a result of the time difference.
    2. The company attends an institutional investor conference by invitation.
    3. Other circumstances for which the company has made an application and the TPEx considers to be necessary circumstances.
  2. At the latest, one day prior to the date of convening or one day prior to the date of attending of the conference, the company shall issue a material information disclosure and announce relevant information such as the date, time, and place.
  3. Filing of information disclosed in an institutional investor conference shall be done in compliance with Article 3, paragraph 2, subparagraph 14 of the TPEx Rules Governing Information Reporting by Companies with TPEx-listed Securities.
  4. The financial and business information disclosed in the conference may not go beyond the scope of the information filed under the preceding subparagraph.
    A TPEx secondary listed company shall comply with the following particulars in connection with an institutional investor conference or press conference:
  1. At the latest, 1 day prior to the date of convening or 1 day prior to the date of attending of the conference the company shall issue a material information disclosure and announce relevant information such as the date, time, and place.
  2. Filing of information disclosed in an institutional investor conference shall be done in compliance with Article 3-5, paragraph 2, subparagraph 11 of the TPEx Rules Governing Information Reporting by Companies with TPEx-listed Securities.
  3. The financial and business information disclosed in the conference may not go beyond the scope of the information filed under the preceding subparagraph.
Article 9     When the TPEx discovers that a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company has failed to published any material information under Article 4 or Article 5, the TPEx may, when it deems necessary, make inquiries by facsimile, telephone, or e-mail of the spokesperson or acting spokesperson of the aforementioned company, the agent for litigious and non-litigious matters of the TPEx primary listed company, or the agent of the TPEx secondary listed company in Taiwan, who shall input explanations relevant to the inquiry into the TPEx-designated information filing website within the time limit prescribed in the following subparagraphs. This provision, however, shall not apply if, for any reasons not attributable to the company, the listed, primary listed, or secondary listed company is unable to input the explanations within the prescribed time limits, and the company has obtained approval of an extension from the TPEx:
  1. If the company receives the inquiry from the TPEx before 5 p.m. on a given trading day, it shall immediately input the explanations of the material information, no later than 2 hours after receiving the notice.
  2. If the company receives the inquiry from the TPEx at or after 5 p.m. on a given trading day, or on a weekend day or holiday, it shall immediately input the explanations of the material information, no later than two hours before the commencement of the trading hours of the following trading day.
  3. In the event of an emergency or any other material event, it shall input the explanation within the deadline designated by the TPEx.
    An investor may make a written inquiry to the TPEx, with supporting documentation attached thereto, concerning any failure by a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company to duly publish material information, and the TPEx may use the original inquiry or an abstract thereof to make inquiries of the company during regular business hours.
Article 10     When the TPEx discovers any irregularity in securities trading pursuant to the Regulations Governing Implementation of Market Surveillance System for Securities Traded on the TPEx or the procedures for verification of material information concerning irregular securities trading, it may complete a Public Statement Concerning Material Information - Form (1) (Table1), and make inquiries by facsimile, telephone, or email of the spokesperson or acting spokesperson of the relevant company, the agent for litigious and non-litigious matters of the TPEx primary listed company, or the agent of the TPEx secondary listed company in Taiwan. The relevant company shall comply with the procedures set forth in paragraph 1 of the preceding article with respect to the content of the inquiry.
    If a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company or its agent in Taiwan is for any other reason unable to input material information into the TPEx-designated information filing website, and publishes the material information through the Public Statement Concerning Material Information - Form (2) (Table 2), the TPEx may publicly announce the information pursuant to regulations, or disclose it generally through the TPEx's information transmission system, or take other measures pursuant to the TPEx Rules Governing Implementation of the Taipei Exchange Monitoring System, and may forward photocopies to all TPEx securities firms to publicly post at their places of business and display them in the TPEx reading room for reference by the investor public.
Chapter III Press Conferences Concerning Material Information
Article 11      "Material information in a press conference concerning material information of a TPEx listed company" means the following particulars provided by the TPEx listed company on its own initiative, or investigated and verified at the initiative of the TPEx:
  1. Dishonor of a negotiable instrument due to insufficient deposits, refusal by a financial institution to honor a transaction, inability to redeem a bond upon maturity or upon the request of the creditor, other loss of credit of a TPEx listed company or parent company or subsidiary thereof, creation or release of pledge on directors' shares, or significant change in shareholding of the parent company.
  2. Any material effect on company finances or operations resulting from a litigious or non-litigious matter, administrative disposition, contentious administrative procedure, provisional attachment, provisional injunction, or compulsory execution with respect to a TPEx listed company or a responsible person thereof.
  3. Serious decrease in production or complete suspension of work.
  4. Reorganization or bankruptcy procedure of a TPEx listed company or parent or subsidiary thereof, and any and all events occurring in the course of such procedure, including any petition made to a court and any notice given or ruling handed down by a court, or any ruling prohibiting transfer of shares or any precautionary measure ordered by a court under relevant laws such as the Company Act or the Bankruptcy Act.
  5. Any material effect on company finances or business resulting from any signing, termination, or rescission of an important memorandum of understanding, a plan for strategic alliance or business cooperation with another company, or a mutual non-competition commitment, or an important contract; or change in important content of a business plan, or completion of development of a new product, or successful development and formal entry into the mass production stage of a test product, or any major progress on the development of a new product or new technology.
  6. Resolution by the board of directors or a shareholders meeting of a TPEx listed company to apply for termination of TPEx trading of its securities.
  7. Resolution by the board of directors for capital reduction (excluding retired treasury stocks), merger or consolidation, cancellation of merger or consolidation, demerger, acquisition, share exchange or conversion or transfer of shares from another, dissolution, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof; or inability for any reason to convene a subsequent shareholders' meeting of a company participating in a merger or consolidation, demerger, acquisition, or transfer of shares from another, or veto of the proposal for merger, consolidation, demerger, acquisition, or transfer of shares from another, for any reason; provided, this shall not apply to cases under the following two circumstances:
    1. Cases of a merger/acquisition that does not require a resolution of the shareholders' meeting, conducted in accordance with Article 18, paragraph 7, Article 29, paragraph 6, or Article 36, paragraph 1 or 2 of the Business Mergers and Acquisitions Act, where the non-surviving enterprise or the share converting company not listed on the TWSE or TPEx has capital of less than NT$100 million, or a merger/acquisition conducted in accordance with Article 19, paragraph 1, Article 30, paragraph 1, or Article 37, paragraph 1 of the Business Mergers and Acquisitions Act. If the merged company's stock has no par value or a par value other than NT$10 per share, for the calculation of the aforesaid paid-in capital, net worth shall be substituted.
    2. Cases of capital reduction by a major subsidiary or a subsidiary of an investment holding company or an financial holding company as specified under Article 7, paragraph 3.
  8. Transactions between the TPEx listed company and related parties: acquisition or disposal of real property, or acquisition or disposal of assets other than real property, where the monetary amount of a single transaction, or of cumulative transactions with a single trading counterparty within 1 year, reaches 20 percent of the company's paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more. However, this requirement shall not apply to the following transactions:
    1. Government bond trades, RP/RS bond trades, or subscription or redemption of domestic money market funds.
    2. A financial holding company, banking enterprise, insurance enterprise, securities enterprise, or any subsidiary thereof, acquiring or disposing of publicly offered domestic open-end funds issued by its parent company or a subsidiary, or engaging in bill or bond transactions.
    3. Transactions between a parent company and a subsidiary or between the subsidiaries of the TPEx listed company.
    If the company's stock has no par value or a par value other than NT$10 per share, for the calculation of the aforesaid 20 percent of paid-in capital, 10 percent of net worth shall be substituted.
  9. Occurrence of a disaster, group protest, strike, environmental pollution event, a disposition by a competent authority, or other material event, resulting in a material loss to the company, where the anticipated loss after deducting the insurance benefits imputed based on the insurance contracts, exceeds 20 percent of the company's paid-in capital or NT$300 million or more. If the company's stock has no par value or a par value other than NT$10 per share, for the calculation of the aforesaid 20 percent of paid-in capital, 10 percent of net worth shall be substituted.
  10. Revocation by the competent authority of the permit of a financial holding company or of a TPEx listed company defined as a banking, securities, futures or insurance enterprise under Article 2 of the Organic Act Establishing the Financial Supervisory Commission.
  11. Any suspension of trading under Article 4, paragraph 1, subparagraph 4, 19, 27, or 40, or occurrence of a circumstance under subparagraph 46.
  12. Any major policy resolutions of the board of directors of the company, or any other circumstance with a substantial effect on shareholders' equity or the price of the securities.
    When any circumstance in the subparagraphs of paragraph 1 applies to a major subsidiary of a TPEx listed company, or a subsidiary of a TPEx listed company that meets any of the standards in Article 7, paragraph 3, or the domestic parent company of a TPEx listed company that is a subsidiary of the parent company that is neither TWSE (nor TPEx) listed nor an emerging stock company, it shall be deemed material information of the TPEx listed company.
     The provisions of this article that are applicable to TPEx listed companies shall apply mutatis mutandis to TPEx primary listed companies.
Article 12      If any circumstance set forth in any subparagraph in the preceding article applies to a TPEx listed company, or the company discovers that mass media reportage has a significant impact on the market status of its securities or that mass media reportage of any circumstance set forth in any subparagraph of the preceding article diverges from facts, the company shall complete a "Report to Convene a Press Conference Concerning Material Information" (Table 3) specifying the content of the information, and promptly send it to the TPEx for handling. Unless the TPEx deems there to be a necessity to postpone handling, the company shall promptly dispatch a spokesperson or acting spokesperson to hold a press conference at the TPEx in person or through video conferencing by the next trading day following the occurrence of the event or discovery of the broadcast media report. Where foreign laws or regulations impose time constraints concerning material information that a TPEx listed company is required to report under these Procedures, the TPEx listed company may in accordance with the foreign laws or regulations make the disclosure simultaneously therewith. Except in the case of material information that is required to be reported in advance, if the above-mentioned press conference is held on a day that is not a business day in Taiwan, or after 9:00 p.m. Taiwan time, then it must release the information in Taiwan within 2 hours before the beginning of trading on the next business day.
    To ensure timeliness, a TPEx listed company filling out a report pursuant to the preceding paragraph shall first transmit it by facsimile and then deliver the original report. If after delivery of the original report any discrepancy with the originally facsimiled is discovered, the TPEx listed company shall bear the responsibility, and shall publicly announce and explain the discrepancy. A report submitted by a TPEx listed company shall be filled out consistently with the facts, and shall be chopped with the chops of the company and its responsible person or manager, to indicate that they take responsibility for it.
    In addition to being allowed to dispatch its spokesperson or acting spokesperson to hold a press conference pursuant to paragraph 1, a TPEx primary listed company is permitted to dispatch its litigious and non-litigious agent or an independent director for that purpose.
    At the occurrence of any circumstance specified in paragraph 1, subparagraphs 1, 2, 6, 7, and 10 of the preceding article, or in Article 4, paragraph 1, subparagraphs 19 and 40, or any other matter that the TPEx deems material, a TPEx listed company shall dispatch above-mentioned personnel to hold a press conference in person at the TPEx; such press conference may not be held through video conferencing. However, this rule does not apply to TPEx primary listed companies.
    When a circumstance set forth in paragraph 1, subparagraph 7 of the preceding Article applies to a TPEx listed company, the TPEx listed company shall hold a press conference at the TPEx during the non-trading hours immediately following the board meeting resolution. If there is more than one participating TWSE listed, TPEx listed, or emerging-stock company, the companies shall hold the press conference simultaneously. In extraordinary circumstances where the press conference cannot be held in a timely manner and following the approval of the TPEx, the company shall immediately input such information or explanation into the Internet information reporting system designated by the TPEx, and then promptly complete the holding of the press conference.
     When a TPEx listed company will hold a press conference in accordance with these Procedures, it may, when necessary, do so in the form of a press conference concerning material information that is open to participation by investors.
Article 13     When the TPEx discovers or mass media report the existence of any material information set forth in Article 11 with respect to a TPEx listed company or TPEx primary listed company, if the TPEx deems it necessary, it may specify the source and content of the information to notify the company to request that it dispatch a spokesperson or acting spokesperson to hold a news conference in person or through video conferencing by a deadline set by the TPEx. When necessary, the company also may hold the conference in the form of a press conference concerning material information that is open to participation by investors.
Chapter IV Halt and Resumption of Trading
Article 13-1      If a TPEx listed company plans to publicly disclose, or to convene a board of directors meeting to adopt a resolution on, any of the circumstances in the following subparagraphs before 5 p.m. on a business day, it shall apply to the TPEx for a halt of trading, submitting an Application for Halt of Trading (Table 4) stating the reasons and relevant content, on the business day before the public disclosure or the meeting, provided that it may submit the application before 7 a.m. on the business day of the public disclosure or the meeting in the event of an emergency preventing application within the deadline:
  1. Serious decrease in production or a complete suspension of work.
  2. An event set forth in any subparagraph of Article 185 of the Company Act, unless the event has no material effect on shareholders' equity or securities prices.
  3. A petition to a court for bankruptcy or reorganization.
  4. Merger or consolidation, demerger, acquisition, or exchange or conversion of shares or transfer of shares from another, or cancellation of any of the above, unless no shareholders' resolution is required for the merger or consolidation as under Article 18, paragraph 7, Article 19, paragraph 1, Article 29, paragraph 6, Article 30, paragraph 1, Article 36, paragraphs 1 or 2, or Article 37, paragraph 1 of the Business Mergers And Acquisitions Act, or there is no material effect on shareholders' equity or securities prices.
  5. Completion of development of a new product, successful development and formal entry into the mass production stage of a test product, or major development progress of a new product or new technology, unless there is no material impact on shareholders' equity or securities prices.
  6. Other circumstances with a material effect on shareholders' equity or securities prices.
     When trading of the securities of a TPEx listed company has been halted, the company shall immediately provide an explanation to the TPEx when there is any material change in the circumstances that caused the halt of trading.
Article 13-2     The TPEx may publicly announce a halt of trading of the securities of a TPEx listed company in accordance with the following provisions:
  1. The TPEx finds upon deliberation that the application by the TPEx listed company for a halt of trading pursuant to Article 13-1, paragraph 1 is justified.
  2. Mass media reportage or other information indicates a circumstance with a material effect on the shareholders' equity or securities prices of the TPEx listed company has occurred, the company is unable to fully explain the material circumstance, and the TPEx deems a halt of trading necessary to meet the needs of the exchange market or protect shareholder equity.
  3. The TPEx listed company is unable to fully explain information relevant to the cause for the halt, and the TPEx deems it necessary to continue with the halt.
     Each halt of trading shall last from at least 1 to not more than 3 business days and may continue to be enforced when necessary.
    The TPEx may reject the application by the TPEx listed company for a halt of trading in any of the following circumstances:
  1. The application for a halt of trading is made in the absence of a circumstance under Article 13-1, paragraph 1.
  2. The halt of trading is unnecessary as a public disclosure or explanation has been made by the TPEx listed company.
  3. The TPEx deems the application by the TPEx listed company for a halt of trading unjustified or deems a halt inadvisable.
Article 13-3      When trading of the securities of a TPEx listed company has been halted because of a circumstances under any subparagraph of Article 13-2, if all of the following provisions are complied with, and none of the other circumstances in the subparagraphs of Article 13-2 exists and, on the same day that the facts in the following subparagraphs occur, the company fills out an Application for Resumption of Trading (Table 5) and applies to the TPEx for resumption of trading, the TPEx may publicly announce the resumption of trading of its TPEx listed securities:
  1. It has fully explained the information relevant to the cause for the halt of trading.
  2. Because of change in the circumstances, it is unnecessary to continue the halt of trading.
     If the TPEx listed company complies with the provisions of the preceding paragraph but fails to make a timely application for resumption of trading of its TPEx listed securities, the TPEx may proceed directly to publicly announce resumption of trading of the company's TPEx listed securities.
Article 13-4     A TPEx listed company shall prescribe operational procedures for applications for halt and resumption of trading, and the procedures shall be adopted by a resolution of its board of directors. The procedures shall expressly set forth the level of authority required for final decision making, which may not be lower than the level of general manager or the equivalent position.
     Applications filled out by a TPEx listed company pursuant to Article 13-1, paragraph 1 shall be governed, mutatis mutandis, by Article 12, paragraph 2.
Chapter V Sampling Checks and Penal Provisions
Article 14     The TPEx may from time to time select TPEx listed and TPEx primary listed companies according to the standards for sampling checks set forth below and require them to submit financial and business related materials or photocopies thereof for purposes of verifying material information disclosures and the timeliness, accuracy, and completeness thereof. When necessary, it may also carry out an on-site audit.
  1. Standards for sampling checks:
    1. Among securities for which information for attention in trading has been publicly announced, those securities with relatively many cumulative instances thereof in the current month.
    2. Companies that have published very little material information in the current month, or that have published material information of an unusual nature.
    3. Companies that are objects of complaints for failing to publish material information, delaying its publication, or publishing untrue material information.
    4. Obvious severe irregularities in operating conditions.
    5. Any circumstances the TPEx deems to require investigation and verification.
  2. Financial and business materials to be submitted:
    1. Minutes of board of directors meetings.
    2. Trading certificates, vouchers, books and statements, and related materials.
    3. Relevant materials supporting the content of the material information.
    4. Other materials the TPEx deems need to be provided.
    Rules governing the sampling check operations referred to in the preceding paragraph shall be separately prescribed by the TPEx.
    The TPEx may, when it deems necessary, make enquiry to a TPEx secondary listed company or its agent in Taiwan, or otherwise request the same to provide related information, in accordance with the Contract for TPEx Trading, the TPEx Operating Rules, or these Procedures.
Article 15     Where any of the following circumstances applies to a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company, the TPEx may on a case-by-case basis impose a breach penalty of NT$30,000; provided, however, where the cumulative number of penalties within the most recent year has reached two or more (inclusive of the current penalty), and the circumstances in an individual case are due to intent or material negligence, or have a material impact on shareholder equity or securities prices, the TPEx may impose a penalty of NT$50,000 to NT$5 million. If it is necessary for the company to make a supplementary information disclosure, it shall do so within the period of time prescribed by the TPEx, and if it still fails to comply by the deadline, a breach penalty of no less than NT$50,000 and no more than NT$ 5 million per instance may be imposed until the date of compliance:
  1. The company violates any provision of these Procedures that is applicable to material information or institutional investor conferences.
  2. The content of the material information uses descriptions that are exaggerated or that resemble advertising or promotional language.
  3. The company arbitrarily publishes unconfirmed news or discloses information that diverges from fact.
  4. The company publishes information that is not in conformance with Article 2 of the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and that affects shareholder equity.
  5. The company fails to submit relevant materials required by the sampling check within the time limit set by the TPEx.
    If an event under Article 5, paragraph 1, subparagraph 2 is found on the part of a TPEx secondary listed company, and the company fails to simultaneously file the event on the Internet information filing system designated by the TPEx, or fails to simultaneously submit required documents and materials to the TPEx pursuant to Article 5, paragraph 2, then the TPEx may, at its sole discretion, impose a breach penalty of no less than NT$1 million to no more than NT$5 million. However, if the cumulative number of penalties within the most recent 1 year reaches two or more (inclusive of the current penalty), the current penalty may be increased to NT$5 million.
    If a TPEx listed company or TPEx primary listed company violates any provision of these Procedures that is applicable to press conferences concerning material information or to halt and resumption of trading, the TPEx may impose a breach penalty of NT$50,000 for each individual case of violation, provided that if the cumulative number of penalties within 1 year reaches two or more (inclusive of the current penalty), a breach penalty of NT$100,000 shall be imposed as the current penalty. In the event of a breach that is assessed by the TPEx to have a material impact on shareholder equity or the price of securities, a breach penalty up to NT$5 million may be imposed. Where a TPEx listed company is required to make up some measure, it shall do so within the period of time prescribed by the TPEx, and if it still fails to do so by the deadline, a breach penalty of no less than NT$100,000 and no more than NT$5 millionper instance may be imposed until the day the measure is carried out.
    Where any of the circumstances in paragraph 1 applies to a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company, and where upon imposition of a breach penalty per day by the TPEx, the company still fails to comply by the deadline, and such event is of a material nature, or where upon receipt of notice from the TPEx requiring it to hold a press conference or to apply for halt or resumption of trading, the company still fails to do so and the circumstances of the specific case are serious, the TPEx may furthermore impose the requirement of advance collection of payment and securities in trading of the company's securities, or suspend or terminate TPEx trading of the securities under Article 12, Article 12-1, Article 12-2, or Article 12-6 of the TPEx Rules Governing Securities Trading on the TPEx.
    A TPEx listed company, TPEx primary listed company, or TPEx secondary listed company on which a breach penalty is imposed shall pay the penalty to the TPEx's Management Department within 5 days from receiving notice from the TPEx.
    If any circumstance under paragraph 1, subparagraph 3 applies to a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company, the TPEx shall compile the relevant information and submit it to the competent authority as a basis for it to take further measures.
Article 16     Any imposition of penalty on a TPEx listed company, TPEx primary listed company, or TPEx secondary listed company for a violation of these Procedures will be disclosed by the TPEx in the Section Designated for Violations by TPEx Listed Companies of Rules Governing Information Filing, Material Information, and Press Conferences on the MOPS website.
Chapter VI Supplementary Provisions
Article 17     These Procedures, and any amendments hereto, shall be in force after approval and recordation by the competent authority.