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 on the local equity market.
The changes include the removal of a requirement that a company must be profitable before seeking a primary listing on the Taiwan Stock Exchange or over-the-counter Taipei Exchange, Securities and Futures Bureau Deputy Director Sam Chang (張振山) said on Thursday
About 75 percent of foreign incorporated companies that have launched a primary listing in Taiwan are owned by Taiwanese investors operating overseas, the commission said.
The commission is also to streamline its review process for listing applications, reducing the time needed to six weeks from eight weeks, Chang said.
Last month, the commission announced that it would allow foreign companies with a primary listing in Taiwan to sell shares to any Chinese investor through a private placement, rights issue, acquisition or stake transfer.
Previously, Chinese investors could only trade shares of foreign firms listed on Taiwanese stock markets on the open market, and only Chinese qualified domestic institutional investors were allowed to do so.
The commission is also pushing for the relaxation of a cap on foreign incorporated firms’ China investments based on board members’ shareholdings in those companies, Chang said.
Taiwanese board members, managers and owners of such firms cannot invest more than US$5 million a year in China, privately or through their firms.
The FSC is in discussion with the Investment Commission about removing a restriction against board members of companies incorporated abroad raising funds in Taiwan, Chang said.
He said the FSC is also planning to extend the time that foreign incorporated firms have to transfer shares from share buyback programs to employees before the repurchased shares are canceled.
The new rules would allow five years for such a transfer, up from three years.
Under the new rules, foreign incorporated companies would also be allowed to transfer the shares to non-fulltime employees, such as advisers and part-time workers, he said.
The relaxed regulations on share transfers could only be implemented after the Legislative Yuan approves an amendment to the Securities and Exchange Act (證券交易法), Chang said.
As of the end of last month, a total of 70 companies incorporated abroad had a primary listing on the Taiwan Stock Exchange, of which 61 were owned by Taiwanese investors, and 39 foreign companies had a primary listing on the Taipei Exchange, of which 21 were Taiwanese-owned, FSC data showed.
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