Relaxed rules would permit listed companies with paid-in capital of more than NT$2 billion (US$71.59 million) to shorten their fundraising by offering new shares in the first quarter of next year at the earliest, the Financial Supervisory Commission (FSC) said yesterday.
The commission announced its amendments to the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers (外國發行人募集與發行有價證券處理準則). The changes are expected to take effect in 60 days if there are no objections, the commission told a news conference.
The relaxed rules would benefit 1,245 firms, or 70 percent of all listed firms, it said.
The amendments are the FSC’s latest bid to increase the efficiency of local capital markets.
Currently, a listed firm must apply to the commission for each issuance of new shares, but the changes would allow a listed firm to file an application covering multiple issuances within two years of the new rules taking effect, Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told a media briefing.
On the application, the listed firm would report the number of shares to be issued and its two-year funding goal, Tsai said, adding that upon approval, the firm could issue multiple batches of shares without needing to apply for each batch.
However, the firm’s underwriter would still need to evaluate each issuance planned over the two years, to ensure that they are legitimate, the commission said.
The first issuance should include more than half of the amount of the two-year funding target, Tsai said.
Only listed firms that in the previous three years have not been fined by the FSC for securities breaches and not had a fundraising application rejected by the commission would could take advantage of the changes, Tsai said.
“The relaxed rules would allow greater flexibility for listed firms in terms of shares issuance. Companies can be more agile and issue shares at the time they prefer, as they do not need to apply individually for remaining issuances in the two years and wait for the regulator’s approval,” Tsai said.
The mechanism would boost efficiency in local markets by shortening the procedures for each issuance by about two months, Tsai said.
New share issuances raised NT$156.1 billion in the first three quarters of this year, hitting a record, as more companies took advantage of booming local equities markets to raise funds, the commission said.
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