Amendments to the Regulations Governing the Offering and Issuance of Securities by Foreign Securities Issuers

07/01/2010

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The Financial Supervisory Commission of the Executive Yuan (FSC) amended the Regulations Governing the Offering and Issuance of Securities by Foreign Securities Issuers (the "Regulations") on May 19, 2010. The purpose of this amendment is to expand the channels for the issuance of Taiwan Depository Receipts ("TDRs"), and to increase regulatory oversight over primary exchange (or OTC) listed companies ("Primary Listing Companies"). The key provisions of the amendment are the following:
l	Expand the Channels for the Issuance of Taiwan Depository Receipts
	Secondary exchange (or OTC) listed companies ("Secondary Listing Companies") may now file shelf registrations for the issuance of TDRs. In addition, the shareholders of Secondary Listing Companies may, on the basis of the shares that they own, engage a depository institution to issue TDRs.
l	Foreign Issuers Must File for Public Offerings
	Recognizing that foreign issuers should also be subject to the Securities and Exchange Act, the amended Regulations provide that prior to registering as Emerging Stock Board traded companies ("Emerging Board Traded Companies") or Primary Listing Companies, foreign issuers must file for public offerings with the FSC. Foreign issuers that have already registered on the Emerging Stock Board before this amendment will have to file within six months of the publication of this amendment.
l	Foreign Issuers May Issue Employee Stock Options
	The amended Regulations provide that Primary Listing Companies and Emerging Board Traded Company may issue employee stock options, which will help foreign issuers attract and maintain human capital.