Newsletter
BOND ISSUANCES REQUIRE REDEMPTION FUNDRAISING PLAN
To strengthen controls over the risk of default on corporate bonds, on 30 July 2004 the Securities and Futures Bureau (SFB) of the Financial Su-pervisory Commission ordered that from 1 Au-gust 2004, when a TSE- or OTC-listed pub-lic-issuing company registers its intention, or applies for prior approval, to make an issuance of corporate bonds (including domestic or overseas ordinary corporate bonds, domestic or overseas convertible bonds, or domestic or overseas bonds with stock warrant) in accordance with the Cri-teria Governing the Offering and Issuance of Securities by Securities Issuers, or the Criteria Governing the Offering and Issuance of Over-seas Securities by Issuers, it must submit a fundraising plan for the bonds' redemption, and state the method of custody of funds so raised, in accordance with the Company Act; and it must commission an expert opinion on the specific feasibility of the issuance. If the expert opinion submitted does not support the specific feasibil-ity of the issuance, the SFB will return the reg-istration filing or refuse to grant approval, in accordance with the applicable Criteria.
If the intended bond issuance is a public issuance underwritten by a securities firm, the above ex-pert opinion must be prepared by the lead un-derwriter. If the issuance is not an underwritten public issuance, the expert opinion must be prepared by the certifying accountant.