萬國法律事務所

The Taiwan Stock Exchange Corporation(TWSE) and Taipei Exchange(TPEx) announced that starting from 15 January 2016, companies with TWSE(TPEx) Listed Securities will have to apply to the TWSE(TPEx) for trading suspension if the listed company announces or a board meeting of the listed company is held to pass any resolution relating to events such as serious production decrease, significant major company asset transaction, complete shutdown of work, filing for bankruptcy or reorganization, merger & acquisition, significant success in development of new products.

The purpose of the new mechanism is to reduce information asymmetry between enterprises and investors, and to provide ample time for investors to digest material information that may drastically affect the price of the securities.

In addition to events that materially affect the rights of shareholders or the price of securities, if the companies discover news or other information in the media that materially affects the rights of shareholders or the price of the securities and the companies are unable to clarify on the day of discovery, companies are also obligated to apply to the TWSE(TPEx) for trading suspension.

The trading suspension will be implemented on the basis of business day, and the maximum suspension will be three days. If companies encounter any emergency event, the suspension application may be submitted at the latest by 7:30 am on the trading date.

Upon clarification or change of circumstance, companies may resume trading after their applications or orders from the TWSE.

It is expected such new mechanism will decrease irrational transactions of securities due to market rumors so the stock market in Taiwan will be more sound and healthy.