FSC eases rules on primary listings by Taiwan investors overseas

Taipei, The Financial Supervisory Commission (FSC) has lowered the threshold for primary listings in Taiwan by Taiwanese companies operating overseas to encourage them to raise funds in the local equity market.

Chang Cheng-shan (???), deputy director of the FSC's Securities and Futures Bureau, said the changes include the removal of a requirement that a company must be profitable before seeking a primary listing on the main exchange or the over-the-counter (OTC) market.

According to the FSC, about 75 percent of foreign incorporated companies that have launched a primary listing in Taiwan are owned by Taiwanese investors operating overseas.

Another move, Chang said, is that the FSC will streamline its review process for a listing application, cutting it to six weeks from the previous eight weeks.

In June, the FSC announced it will allow foreign companies that have launched a primary listing in Taiwan to sell shares to any Chinese investor through a private placement, a rights issue, an acquisition or a stake transfer.

Previously, shares of foreign firms listed on Taiwan's stock markets could only be traded by Chinese investors on the open market and only by Chinese qualified domestic institutional investors.

The commission is also pushing for the relaxation of restrictions on board members of foreign incorporated firms' China investments, Chang said.

Currently, individual Taiwanese investors cannot invest a total of more than US$5 million a year in Chinese investments.

Chang said the FSC is in discussion with the Investment Commission to remove the restriction for board members of a foreign incorporated company raising funds in Taiwan.

Chang said the FSC is also planning to extend the period a foreign incorporated firm has to transfer shares from a share buyback program to its employees before the repurchased shares are canceled.

The new rules would allow five years for such a transfer rather than the current three years.

Foreign incorporated companies will also be allowed under the new rules to transfer the shares to non-fulltime employees, such as advisers and part-time workers, he said.

The relaxed regulations on share transfers cannot be implemented until the Legislative Yuan approves an amendment to the Securities and Exchange Act, Chang said.

As of the end of June, a total of 70 foreign incorporated companies had a primary listing on the Taiwan exchange, with 61 of them owned by Taiwanese investors, and 39 foreign companies had a primary listing on the OTC market, with 21 owned by Taiwanese investors, data compiled by the FSC showed.

Source: Focus Taiwan News Channel