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Registering on GISA and Counseling Procedures

Following is the procedures about GISA registering and counseling:

(1)Companies or preparatory offices applying for GISA registering

  1. Companies have to meet the following requirements to apply for GISA registering:
  2. The company must be a company limited by shares or a limited company established in accordance with the ROC Company Act, or must be a preparatory office for the incorporation of a company by public offering under the Company Act.
  3. The company must have an innovative or creative concept and future development potential.
  4. There are no requirements on year of establishment, profitability, or paid-in capital.
  5. Companies are willing to accept TPEx’s integrative counseling.

(2)TPEx and outside expert’s innovation and creativity examination (First-stage examination)

After receiving the application, TPEx will contact outside experts of relevant fields to issue innovation opinions on the company’s or preparatory office’s technology, products, and business model. If more than half of these professionals issue positive opinion on the company or preparatory office, and TPEx examine the company or preparatory office as appropriate, the company can pass the first-stage examination and will be able to receive integrative counseling coordinated by TPEx.

The company or preparatory office meets the following requirements can be exempted from the previous innovation examination procedure conducted by TPEx:

  1. It has obtained an "Innovation and Creativity Opinion Letter" from the central competent authority for the target industry, the Ministry of Science and Technology, a government at the level of county (or county-level city) or above, the National Applied Research Laboratories, the Industrial Technology Research Institute, the Commerce Development Research Institute, the Institute for Information Industry, or other agency that has submitted an application and been recognized by the TPEx (below, a "recommending agency").
  2. It has obtained a recommendation letter issued by the central competent authority for the target industry specifying the reasons that the company possesses innovation and creativity.
  3. It has been awarded a national award recognized by the TPEx and been recommended by a recommending agency.
  4. It has been registered or certified as a social enterprise by a domestic or foreign institution recognized by the TPEx and been recommended by a recommending agency.
  5. Its most recent annual financial report audited and attested by a CPA shows operating revenue of NT$50 million or more.

(3)TPEx’s integrative counseling mechanism

After company pass the innovation and creativity examination, TPEx will provide integrative counseling services, with resources from relevant associations to provide accounting, internal control, marketing, and regulatory integrative counseling services. In this way, innovative non-public small-sized companies are able to set up internal control, accounting, and corporate governance systems.

Basically, above-mentioned counseling period should not exceed two years, but for reasons deemed as appropriate by TPEx, the counseling period can be extended.

(4) Examination prior to GISA registering (Second-Stage Examination)

After the company or preparatory office receives TPEx’s public integrative counseling for some time and TPEx consider the company as appropriate to be registered on GISA, and the company’s registering plan is on schedule, TPEx will proceed to examination prior to registering on GISA. The examination focuses on applying company’s management teams, role of board of directors, effective accounting and internal control systems, and reasonableness and feasibility of capital raising plan prior to GISA registering. If the company passes the examination, TPEx will notify the company to raise capital prior to GISA registering.

(5) Capital raising prior to GISA registering

For the company or preparatory office raising capital prior to GISA registering, the company should post capital raising information on GISA’s webpage, and then investors can purchase through TPEx GISA capital raising system. The company is now allowed to choose the type and list of investors. If the capital raising process cannot be completed, the company cannot be registered on GISA.

(6) Registering on GISA

After companies or preparatory offices complete capital raising process, amendment of certificate of incorporation, or establishment registration, it can choose the registering date to be registered on GISA. TPEx will give a four-digit stock code, and the code also applies even when the company applies for public offering, emerging board, main board of TPEx or TWSE afterwards.

(7) Counseling and supervision after GISA registering

Continuous counseling

After the company being registered on GISA, TPEx will continue to provide counseling about business transparency and internal control effectiveness. Registered companies should send employees for relevant training sessions. A GISA company that will continue to be registered as a GISA company after it has been registered on the GISA board for three years shall do as follows:

  1. Engage a professional shareholder services agency, approved by the TPEx, to handle its shareholder affairs, and be solely responsible for any related fees of the shareholder services agency.
  2. Install full-time accounting personnel, provided that this does not apply if it has already engaged certified public accountants to audit and attest its financial reports.

Supervision- information disclosure requirements

  1. Basic information: main products, management teams, and financial and sales information
  2. Annual filings: information about shareholders' meeting and financial statements
  3. Quarterly filings: raised capital utilization reports
  4. Occasional filings: material information such as return of check, loss of credit, lawsuit, or serious reduction of output.

Suspension mechanism – suspension of GISA capital raising function

  1. The company fails to publicly disclose and file an annual financial statement.
  2. The company fails to convene a regular shareholders meeting by the deadline set in the Company Act.
  3. The company fails to publicly announce material information in accordance with these rules, and fails to correct the matter within a prescribed deadline.
  4. The company fails to abide by an undertaking or commitment made by it.
  5. The company is involved in a material instance of evasion or refusal of TPEx’s counseling or audit.
  6. The company materially violates the Company Act or these Regulations.
  7. Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit.
  8. Other circumstances under which the TPEx deems it necessary to suspend the company's qualification for capital raising through the GISA.

Termination mechanism

  1. The company files with the competent authority for effective registration of supplementary procedures for classification as a public company.
  2. The company's qualification for capital raising through the GISA pursuant to the preceding article has been suspended for over 3 months, and the cause of suspension is not limited to the cause under the same subparagraph.
  3. The company's corporate registration is voided by the competent authority, or the company is dissolved by the competent authority.
  4. The company files with a court for bankruptcy or reorganization.
  5. The company's application documents, information, or explanations contain misrepresentations or important items are omitted.
  6. The company commits a material violation of the Company Act, these Regulations , or the Contract for Acceptance of Counseling and GISA Registration.
  7. The GISA company applies for termination, or there are other circumstances under which the TPEx deems it necessary to terminate the company's GISA registration.