The Financial Supervisory Commission issued the Jin-Guan-Zheng-Fa-1070331908 Circular of August 29, 2018 (hereinafter, the “Circular”) to ease relevant restrictions so that a public company acquiring and disposing of securities are not required to ask a certified public accountant to provide an opinion on the range of trading prices in accordance with the proviso of Article 10 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies (hereinafter, the “Regulations”). The amendments are highlighted below:
1. Since a company which is established by promotion or by offering is not only governed by the Company Law in Taiwan but also may be incorporated pursuant to foreign laws. If the company meets the requirement that capital is contributed by cash with rights represented by securities so acquired comparable to the contribution percentage, there is no issue of unreasonable securities prices. Therefore, relevant restrictions are eased so that a public company acquiring securities from a company established by promotion or offering pursuant to foreign laws while meeting the above requirements is not required to obtain the financial statements of the target company and an opinion issued by a certified public accountant.
2. Since mutual share subscription by cash participated by a public company and its fully-owned subsidiary is part of the reorganization of the corporate group’s organizational structure, companies participating in share subscription should be capable of ascertaining the financial status of the company seeking capital injection. Therefore, the requirement that the financial statements of the target company and an opinion issued by a certified public accountant on the price range shall be obtained may also be exempt.
3. Financial holding companies, banks, insurance companies and securities firms are professional investment institutions that acquire or dispose of securities in their normal course of business and are capable of appraising the prices of securities themselves. If the aforesaid companies, which conduct professional investment practices, have set up relevant valuation models and systems for acquiring or disposing of securities and have adopted appropriate models or statistical means to estimate prices, the requirement for obtaining an opinion from a certified public accountant is exempt.