[Last updated: 1 January 2024, unless otherwise noted]

Continuous disclosure

Once listed, a company will be subject to a continuous disclosure requirement in relation to its routine business. The company will also be required to publicly disclose any material information that has a direct impact on the company. This information must be input into a designated website before the next trading day begins. If a press release is released previously, it must be input into the website at the time of its issuance. A listed company is required to establish its own website and shall disclose information regarding its "stakeholders" on the website.

Where foreign laws or regulations impose time constraints on the disclosure of material information relating to a foreign enterprise, the company may accommodate these time constraints and make the required disclosure at that time.

To ensure the accuracy of and general access to the information, a listed company cannot disclose any information to the public before announcing any material information.

The announcement of material information must describe in detail the facts of the event, the cause, the estimated impact on the company's finance and business, the monetary amount of the impact and any countermeasures.

Under certain circumstances, the spokesperson of a foreign company must hold a press conference (either by video conference or personal attendance at the TWSE) to explain a particular occurrence or event to the press. This would be required to be held on the business day following the day the company learns of the occurrence or media reporting of the event.

There is no significant difference when it comes to the continuous disclosure requirements that apply to a foreign issuer and a domestic issuer.

Financial statements

A primary listed company must use a designated website to provide the TWSE with certain financial information. This includes the consolidated balance sheet, income statement, cash flow statement, statement of changes in shareholders' equity, CPA audit or review report, name of the CPA and matters disclosed in the notes of the financial statements (related party transactions, loans of funds, endorsements and guarantees, and acquisition or disposal of assets).

Since fiscal year 2012, annual data must be provided within three months from the closing of each fiscal year. The deadline for data for each quarter is forty-five days from the end of the quarter.

A secondary listed company must provide the TWSE with annual and semi-annual consolidated financial statements, condensed balance sheets and condensed income statements. The compliance adviser must disclose the financial and business information of the secondary listed company on the website of the adviser on a quarterly basis.

The above information must be publicly announced at the same time as is required by the laws and regulations of the home country or country of listing of the foreign issuer, but the annual data must be reported no later than six months after the closing of each fiscal year. Also, if the laws or regulations of the home country or country of listing of the foreign issuer require preparation of first and third quarter financial statements, these must also be publicly announced at the same time.

These financial statements must be audited.

In practice, foreign issuers of primary listings and domestic issuers follow the same standards in preparing the financial statements, which are Taiwan GAAP, now consistent with the International Financial Reporting Standards.

Insider dealing

The Securities and Exchange Act (SEA) provides that it is a criminal offence for an individual who has "inside information," and has that information "as an insider," to deal with securities on the TWSE or another regulated market, or through a professional intermediary.

Article 157-1 of the SEA prohibits certain persons from purchasing or selling, in the person's own name or in the name of another, shares of a company that are listed on an exchange or an over-the-counter market, or any other equity-type security of the company. This prohibition applies:

• Upon actually knowing any information that will have a material impact on the price of the securities of the issuing company.
• After the information becomes precise and final.
• Before the public disclosure of the information or within 18 hours after its public disclosure.

The types of persons to whom the prohibition applies are:

• A director, supervisor and/or managerial officer of the company.
• A natural person designated to exercise the powers of a representative pursuant to paragraph 1, Article 27 of the Company Act.
• Shareholders holding more than 10% of the company's shares.
• Any person who has learned the information by reason of an occupational or controlling relationship.
• A person who, though no longer among those listed in one of the preceding bullets, has only lost that status within the preceding six months.
• Any person who has learned the information from any person described in any of the preceding bullets.

Anyone who violates the insider dealing prohibition can be held liable to trading counterparts who on the day of the violation undertook the opposite-side trade with bona fide intent. Damages would be equal to the difference between the purchase or sale price and the average closing price for 10 business days after the date of public disclosure. The court may assess three times these damages, if the violation is severe, and may reduce the damages if the violation is minor.

Under Article 171 of the SEA, the penalty for an offense is imprisonment for three to ten years. In addition, a fine of NT$10 million to NT$200 million (approximately US$326,000 to US$6.52 million) may be imposed. However, if the amount gained by the commission of an offense is NT$100 million (approximately US$3.26 million) or more, a sentence of imprisonment for at least seven years will be imposed, and a fine of NT$25 million to NT$500 million (approximately US$815,000 to US$16.30 million) may be imposed.

Foreign issuers and domestic issuers must follow the same insider dealing law.

Market manipulation

The SEA provides that market manipulation is a criminal offence. Pursuant to Article 155 of the SEA, the following actions with regard to securities publicly listed on a stock exchange are prohibited:

• To order or report a trade on a centralized securities exchange market and fail to perform settlement after the transaction is made, where the act is sufficient to affect the market order.
• To conspire with other parties in a scheme such that the first party buys or sells designated securities at an agreed price, while the second party buys or sells from the first party in the same transaction, with an intention to inflate or deflate the trading prices of securities that are traded on the centralized securities exchange market.
• To continuously buy at high prices or sell at low prices designated securities for one's own account or under the names of other parties, with an intention to inflate or deflate the trading prices on securities that are traded on the centralized securities exchange market.
• To continuously order or report a series of trades under one's own account or under the names of other parties and complete the corresponding transactions with an intention of creating an impression on the centralized securities exchange market of brisk trading in a particular security.
• To spread rumors or information, with an intention to influence the trading prices of designated securities that are traded on the centralized securities exchange market.
• To perform directly or indirectly any other manipulative acts to influence the trading prices of securities that are traded on the centralized securities exchange market.

Persons who violate this "market manipulation clause" will be held liable to compensate the damages suffered by the bona fide purchasers or sellers of the securities.

The criminal penalties for market manipulation are imposed under Article 171 of the SEA and are the same as described above for insider dealing.

Certain of the requirements in this section 4 are different from what would be expected of a domestic company.

Foreign issuers and domestic issuers must follow the same market manipulation law.