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Registering on GISA and Counseling Procedures

Registering on GISA and Counseling Procedures

Following are the procedures about GISA registering and counseling:

A. Applying for GISA Counseling

Companies have to meet the following requirements to apply for GISA counseling：

  1. The company must be a company limited by shares or a limited company established in accordance with the ROC Company Act.
  2. The company must have an innovative or creative concept and future development potential.
  3. There are no requirements on the year of establishment, profitability, or paid-in capital.
  4. Companies are willing to accept TPEx’s integrative counseling with CPAs.

B. Recommending Agencies (Outside Experts) Making Innovation and Creativity Assessment

Companies obtain an "Innovation and Creativity Opinion Letter" from recommending agencies (outside experts) after which they can apply for GISA Counseling. Recommending agencies include 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, underwriters, CPA Associations, joint CPA firms, Taiwan Venture Capital Association and its members, Taiwan Private Equity Association and its members, or other agencies that have submitted an application and been recognized by TPEx (please see https://www.tpex.org.tw/zh-tw/gisa/aplply/contact.html ).

Those who meet one of the following conditions are not required to obtain an "Innovation and Creativity Opinion Letter" and may directly apply for GISA Counseling：

  1. Its most recent annual financial report was audited and attested by a CPA that shows operating revenue of NT$50 million or more.
  2. It has been invested in by the National Development Fund.
  3. It Obtained innovation and research development subsidies through the Ministry of Economic Affairs' " The Small Business Innovation Research " (SBIR Program) or "Service Industry Innovation Research Program" (SIIR Program).
  4. It has been officially approved for establishment in the science park involved in innovation, manufacturing, and research and development (R&D) of high-tech products or services (science-based enterprise).

C. TPEx’s Integrative Counseling Mechanism

If the applying company passes the innovation and creativity assessment or meets the criteria for exemption from the assessment, and after comprehensive consideration by TPEx, there are no violations of integrity principles, significant violations of laws, or involvement in major irregular transactions, TPEx will provide integrative counseling services.


D. Assessment Prior to GISA Registering about Counseling Effectiveness

After the company receives TPEx’s and CPAs’ integrative counseling within a prescribed timeline and TPEx considers the company as appropriate to be registered on GISA, TPEx then assess counseling effectiveness. The assessment prior to GISA registration focuses on corporate governance, whether its internal control and accounting system are sound and effectively implemented, along with the financial statements complies with the provisions of the Business Accounting Act.


E. Capital Raising Prior to GISA Registering (Optional)

If a company in integrative counseling chooses to conduct a cash capital increase prior to registering on GISA, its cash capital increase plan should be reasonable and feasible, in addition to relevant information being announced on the dedicated section of TPEx website.


F. Registering on GISA

A company in integrative counseling seeking to register on GISA and obtains a stock ticker symbol should meet following requirements：

  1. It must be a company limited by shares or a limited company established in accordance with the ROC Company Act.
  2. It has established a sound internal control and accounting system, has effectively implemented them, and the accounting treatment complies with the provisions of the Business Accounting Act.
  3. Its most recent annual financial report should be audited and attested by a CPA.

G. Counseling and Supervision after GISA Registering

Continuous counseling

After the company is registered on GISA, it shall engage a CPA to audit and attest to its financial statement annually, and should announce its basic information. After three years being registered as a continous GISA company, it shall engage a professional shareholder services agency, approved by TPEx, to handle its shareholder affairs, and be solely responsible for any related fees of the shareholder services agency.

  1. Engage a professional shareholder services agency, approved by 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, this does not apply if it has already engaged certified public accountants to audit and attest to 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 a bounced check, loss of credit, pressing legal matters, or serious reduction of output.

Suspension mechanism – suspension of GISA capital raising function

  1. The company fails to publicly disclose and file its annual audited and attested to financial statements.
  2. The company fails to convene a regular shareholder 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 TPEx deems it necessary to suspend the company's qualification for capital raising through 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 GISA pursuant to the preceding article has been suspended for over three 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 TPEx deems it necessary to terminate the company's GISA registration.