| Article 2 |
A financial holding company applying for OTC listing of its stock shall meet the following requirements:
1. The company has obtained an approval letter issued by the competent authority in charge of the relevant industry.
2. The company has been incorporated under the Company Act for two complete fiscal years; provided that where the actual operation period of one or more of its banking subsidiaries, insurance subsidiaries, or securities subsidiaries exceeds two complete fiscal years, such period may be used in lieu of the incorporation period for financial holding companies.
3. Profitability. The company has ratio of income before tax to paid-in capital, as reported on the consolidated financial statement compiled in accordance with the Statement of Financial Accounting Standards No. 7, that reaches 4 percent or more for the most recent year, with no year-end accumulated deficit for the most recent fiscal year; or reaches 3 percent or more for each of the most recent two years; or reaches an average of 3 percent or more for the most recent two years, with profitability for the most recent year more favorable than that for the previous year. The profitability as reported in the above consolidated financial statements does not take into account the effects of the net income/loss of minority shareholdings. However, the above income before tax for the most recent fiscal year shall not be lower than NT$4 million.
4. Shareholding dispersion. The number of its registered shareholders, excluding company insiders and any juristic person in which such insiders hold more than 50 percent of the shares, shall not be less than 300; the total amount of the combined shareholdings of such registered shareholders shall constitute 20 percent or more of the total issued shares, or more than 10 million shares.
5. The directors, supervisors, and shareholders holding 10 percent or more of the total issued shares have undertaken centralized custody of their shareholdings and withdrawal of the shares at expiration of the period of custody in accordance with the GreTai's Rules Relating to Article 3, Paragraph 1, Subparagraph 4 of the GreTai Securities Market Rules Governing Review of Securities Traded on Over-the-Counter Markets.
6. The company has received a written recommendation from two or more securities firms. However, one of those securities firms shall be designated as the principal recommending securities firm, while the other(s) shall be co-recommending securities firms.
7. The company has established a professional agent for stock affairs or a stock affairs unit in the GreTai's locality for handling of the company's stock affairs.
The provisions of Article 10 of the GreTai Securities Market Criteria Governing Review of Securities Traded on Over-the-Counter Markets shall apply mutatis mutandis to the application for OTC-listing by a financial holding company. Provided, however, that where none of the events enumerated in paragraph 1 of said Article 10 applies to a financial holding company, but any of the events in subparagraphs 1, 3, 4, 6, 7, or 10 of Article 10 applies to a subsidiary of the holding company and the GreTai deems it unsuited for OTC-listing, the GreTai may disapprove the OTC listing of the stock of the financial holding company.
The term "subsidiary" as used in the preceding two paragraphs means either of the following:
1. A banking subsidiary, insurance subsidiary, or securities subsidiary in which a financial holding company has a controlling interest; or
2. Any other entity in which the financial holding company holds more than 50 percent of the issued voting shares or of the total authorized capital, or in which the financial holding company has directly or indirectly elected or designated the majority of the directors.
The term "company insider" as used in paragraph 1, subparagraph 4 means the directors, supervisors, and managerial officers of the company, shareholders holding more than 10 percent of the company's total shares, and their spouses and minor children.
The professional shareholders services agent or shareholder services unit referred to in paragraph 1, subparagraph 7 shall possess documentation of the following matters issued by the Taiwan Depository and Clearing Corporation (TDCC):
1. All of the personnel and equipment involved in its handling of stock affairs meet the requirements set forth in the Regulations Governing Handling of Stock Affairs by Public Companies.
2. During the past three fiscal years there has been no instance of its failure to make improvements by a deadline after auditing by the Taiwan Securities Central Depository Company and issuance of written recommendations for improvement. |
| Article 8 |
These Supplemental Directions, and any subsequent amendments, shall take force after their passage by the GreTai Securities Market board of directors and submission to and approval and/or recordation by the competent authority. |
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