SECURITIES ISSUANCE GUIDELINES AMENDED

05/01/2000

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On 31 March 2000, the Securities and Futures Commission (SFC) published amendments to its Guidelines for Handling Offering and Issuance of Securities by Issuers. The main changes in-clude:

In view of the less strict OTC listing require-ments for Category II* shares, and the higher investment risk associated with such shares, the following new rules have been added to protect the interests of the investing public:

1.Rights issues by Category II OTC com-panies need not include a public offering;
2.Category II OTC companies may not issue convertible corporate bonds;
3.Category II shares may not be made the subject of conversion of convertible bonds; and
4.Category II OTC companies need not submit financial forecasts.

Under a new provision, where a Taipei Stock Exchange (TSE) listed company and an OTC company wishing to make a new share issu-ance for the purposes of a merger is in serious breach of the Notes for Mergers Involving Listed and OTC Companies, the SFC will re-fuse permission for the issuance or return the documents unconsidered.

To assist the gathering of statistical informa-tion on rights issues by listed and OTC com-panies, such companies are now required to instruct their designated account holding bank to receive the proceeds and issue a certificate of deposit, which is to be filed with the SFC and copied to the TSE and the ROSE.

* Taiwan Innovative Growing Entrepreneur (TIGER) shares, traded on the second board of the ROC Over-the-Counter Securities Exchange (ROSE)