TPEx Work Report 2018

1.Important Business Plans -

(1)Promoting new companies to join the TPEx multi-layered market

a.Promoting high-quality enterprises to engage in the TPEx capital market - In 2018, there were 53 applications for registration on the Emerging Stock Board (ESB) and 31 applications for listing on TPEx main board.

b.Promoting the entry of companies in key industries into TPEx GISA, ESB and main board - In 2018, there were 52 applications from such companies for registration on GISA, 23 applications for registration on ESB and 13 applications for listing on TPEx main board.

c.In 2018, there were 2 applications from foreign companies for TPEx main board listing, 1 foreign applicant for emerging stock registration, and 12 foreign applicants for GISA counseling service. They totaled 15 new foreign companies looking for engaging in TPEx multi-layered market. TPEx also made business trips to China, Japan, Malaysia, USA, and Vietnam to visit in total 31 local enterprises and held altogether 8 seminars in China, Malaysia, USA and Vietnam.

d.Encouraging startups to apply for registration on GISA - In 2018, there were a total of 75 companies applying for GISA registration or counseling service and attending altogether 94 sessions of GISA-related seminars.

(2)Extending the international bond market development -

a.In 2018, total issuance of international bonds amounted to an equivalent of NT$102 billion.

b.We had established a mechanism for disclosing information regarding the pricing and the price reasonableness of international bonds on TPEx’s website. To inquire information on a TPEx-listed international bond, investors can visit our website and browse the “Statement on the Reasonableness of Bond Pricing” issued by the lead underwriter for reference.

c.We have also started on December 10, 2018 to provide the theoretical prices of USD fixed-rate callable international bonds on TPEx’s website.

(3)Advancing the operational integration of securities and futures markets information services and conduct blockchain adoption test

a.We have completed the OS switching of the main servers for over-the-counter derivatives trade repository (TR) and for the Market Trading Data Feeders to Linux OS.

b.We have also switched the broker-side programming language of TR system to C#.

c.We have planned the timetable for adopting blockchain technology for the clearing and settlement operations of book-entry central government fixed-income securities, studied the implementation mechanism together with the certificate authentication institution and completed a briefing on the planning. We also made discussions with the clearing and settlement related institutions and collected opinions, and finally presented a report to the Central Bank to complete the project.

(4)Enhance diversification of financial products

a.In 2018, 27 bond ETFs (e.g. Yuanta USD Bond 1-3) were listed on TPEx.

b.We passed the review of 24 bond indices as bond ETF benchmarks (e.g. FTSE Chinese Policy Bank Bond 5+ Years Index, but bond ETF not yet issued).

c.In 2018, 14 green bonds had been issued and total amounted NT$33.3 billion.

d.We completed the over-the-counter trading system for green securitization products, which is promulgated and implemented on January 19, 2019.

(5)Strengthening the AML/CFT capabilities of securities firms

a.To strengthen the anti-money laundering awareness and capabilities of securities firms, we invited senior management of securities firms to attend a workshop in the efforts to help them build a strong AML/CFT corporate culture. We also held a workshop for securities firms on AML/CFT practices together with Taiwan Securities Association.

b.We also completed the scheduled AML/CFT audits of 24 securities firms.

(6)Promoting listed companies to implement scheduled material measures laid out in government's corporate governance roadmap for 2018

a.We held 4 seminars of “Institution Investor Conference Practice” in Taipei, Hsinchu, Taichung and Kaohsiung. More than 600 participants from companies with TPEx listed securities attended above seminars.

b.We completed the amendment of the “Taipei Exchange Rules Governing Information Reporting by Companies with TPEx Listed Securities" and implemented the amended Rules on August 30, 2018.

a.Starting from the year 2018, we implemented a new rule regarding mandatory establishment of an audit committee applicable to any domestic or foreign company with paid-in capital or net-worth of NT$600 million or more must meet above requirement while it applies for listing on TPEx.

b.We also required, from the year 2018, all companies that apply for listing on TPEx must purchase liability insurance for their directors and supervisors in advance.

c.We promulgated the amended “Directions for Compliance Requirements for the Appointment and Exercise of Powers of the Boards of Directors of TPEx Listed Companies”, requiring listed companies to adopt standard operating procedures for handling requests made by directors.

d.We promulgated the amended "Rules Governing the Review of Emerging Stocks for Trading on the TPEx", requiring companies applying for registration on Emerging Stock Board to establish independent directors starting 2019.

e.In co-ordination with the programs and measures laid out in the new edition Corporate Governance Roadmap, together with TWSE, we continuously examined the operating framework and contents of evaluation indicators in 2018. We added up more qualitative indicators and adopted differentiated measures upon bonus scoring or penalty scoring according to the guidelines of the Roadmap.

f.TPEx and TWSE jointly amended the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies“, and we promulgated the amendment on December 21, 2018.

2.Routine Operations -

The routine operations under the TPEx work plan 2018 included 260 project goals in 11 categories. Respective departments have actively carried out the business projects they are in charge of and have attained the scheduled goals.

(1)Enhance the quality of IPO applications and assist high-quality domestic and foreign enterprises to engage in the TPEx market.

(2)Advance the Go Incubation Board for Startup and Acceleration Firms (GISA) and related businesses.

(3)Promote corporate governance and enhance market supervision mechanism to safeguard the interests of investors.

(4)Enhance the trading and settlement systems for TPEx-listed stocks and emerging stocks, and promote diversification of investment products.

(5)Step up the strength of market supervision and strictly crack down on illegal trading behavior.

(6)Promote the development of bond market.

(7)Develop the OTC derivatives market.

(8)Strengthen the auditing and supervision over securities firms and leverage transaction merchants.

(9)Maintain and enhance the efficiency, security, and stability of TPEx’s computerized trading systems.

(10)Promote international exchanges and cooperation and enhance innovation and R&D.

(11)Implement efficient response measures and enhance preparedness for material or abrupt events, strengthen risk control and ensure business continuity.