Proposed Deregulation of Listing Rules of Taiwan Stock Exchange

To further deregulate the stock market in Taiwan, Taiwan Stock Exchange Corporation (TSEC) reportedly plans to revise its listing regulations. In addition to the stocks making up the TSEC Taiwan 50 Index, TSEC will allow the investors to short sell the stocks listed in the TSEC Taiwan Mid-Cap 100 Index. In general, short selling of stocks below the stock’s closing price of the previous trading day is not permissible except where the exceptions are made. In order to be listed on the exchange of the TSEC, an applicant company is required to meet the capital threshold of NT$600,000,000 (approximately US$20,000,000), one of the highest in Asia. In an attempt to attract more companies to consider listing opportunities in Taiwan, TSEC is considering to lower this amount. In the same token, TSEC has urged the regulators to amend the relevant regulations which require directors and significant shareholders of the company deposit their shares with centralized depository for a lock-up period of four (4) years. The lifting of the ban on the listing of off-shore companies (including those of the TSEC-listed companies) is also being discussed.