Taiwan Stock Exchange Corp (TWSE, 台灣證交所) aims to ease listing requirements while shoring up corporate governance this year to make local capital markets more vibrant and healthy, TWSE chairman Hsu Jan-yau (許璋瑤) said yesterday.
Starting this year, the exchange would require initial public offering (IPO) applicants to establish an audit committee with three or more independent directors, Hsu said.
IPO applicants must also buy directors’ and officers’ liability insurance, he said, a type of insurance that covers directors and officers for claims made against them while they serve on a board of directors or as an officer.
The requirement is intended to make independent directors more helpful and accountable, following financial fraud involving game developer XPEC Entertainment Inc (樂陞科技) and other listed firms, he added.
The exchange would also require listed firms to hold an investors’ conference at least once per year in Taiwan, regardless of their base of operations, Hsu said.
All listed firms should introduce electronic voting systems to ensure that shareholders can take part in corporate decisions and better protect their interests, he said.
Offers of English-language financial statements and whistle-blower programs would also be added to corporate governance assessments, he added.
TWSE also plans to ease listing terms to allow firms with sizable capitalization to seek an IPO in Taiwan, regardless of whether they turn a profit, Hsu said.
“The goal is to introduce diversified and differentiated listing criteria for firms that have yet to turn a profit, but demonstrate great earnings potential,” Hsu said.
Companies in the high-tech, biotechnology and key farming sectors especially need support in line with the government’s efforts to promote the “five plus two” industries, he said.
The “five plus two” industries refer to the development of an “Asian Silicon Valley,” “intelligent” machinery, “green” energy technology, biomedicine and national defense, as well as establishing a new agricultural business model and a circular economy.
Hsu expressed optimism that local equities would continue to rally on the back of healthy economic fundamentals at home and abroad.
The price-to-earnings ratio for local shares remain healthy at 15 or 16, with yield rates averaging 4 percent, he said.
There is still room for improvement for daily turnover to reach NT$170 billion (US$5.74 billion), as seen in 2007 prior to the global financial crisis, Hsu said.
Turnover last year rose 35 percent to NT$140 billion per day, he said.
TWSE has thrown its weight behind plans to extend a tax cut on day trading — due to expire in April — to allow local bourses a more secure footing, he added.
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