TWSE Market Insights

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The Taiwan Stock Exchange continues to closely observe global trends in the capital markets and responds to feedback from domestic market participants by promptly enhancing its listing regulatory framework. In May and June 2025, the TWSE announced and implemented several amendments to regulations related to securities listings. The key changes introduced in this round of regulatory updates are summarized below.

Background of Amendment
Under Paragraph 2, Article 156 of Taiwan’s current Company Act, if an issuing company issues no-par value shares, the full amount of proceeds from share issuance must be recorded as share capital. Compared with companies adopting a par value of NT$10 per share, this typically results in higher share capital, making it relatively more difficult for those companies to meet the profitability threshold required for a listing application. On the other hand, for companies with non-NT$10 par value shares (i.e. those adopting flexible par value), the amount exceeding the par value is classified as capital surplus. The corresponding amount allocated to share capital varies depending on the par value, resulting in unequal conditions for achieving profitability standards among applicants under different par value systems.

In addition, observations of major international exchanges show that all listed companies on the Hong Kong Exchanges and Clearing have fully adopted the no-par value share system. Likewise, the majority of listed companies on the New York Stock Exchange, the London Stock Exchange, the Tokyo Stock Exchange, and the Singapore Exchange also adopt the no-par value system. This indicates that the no-par value stock system is a common practice in today’s major international capital markets, demonstrating both high feasibility and broad market acceptance worldwide.

In accordance with the regulations of the competent authority regarding the supervision of publicly listed companies in Taiwan, there are specific financial ratio requirements applicable to companies with no-par value shares or shares with a par value other than NT$10. For instance, under the “Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants,” “Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses,” “Regulations Governing the Publication of Financial Forecasts of Public Companies,” “Regulations Governing the Acquisition and Disposal of Assets by Public Companies,” and “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” the approach of “substituting net worth for share capital and calculating ratios at half the value” has been adopted. To align the regulatory standards for publicly listed companies with those for initial listing applications and post-listing supervision, this amendment incorporates the same principles into the profit calculation criteria used in listing reviews. Meanwhile, relevant regulations have been reviewed and adjusted accordingly to ensure that Taiwan’s listing system keeps pace with international trends and is more accommodating to companies with different par value systems. The key points of this amendment are summarized as follows:

(I) When calculating profitability or financial ratios, the method of “substituting net worth for share capital and calculating ratios at half the value” shall be applied

The company’s calculation of profitability or financial ratios for applicant companies shall comply with relevant regulations. This amendment applies to companies with no par value or a par value per share not equal to $10, including: 

1. Profitability for initial listing applications: Amendment to Subparagraph 3, Paragraph 1, Article 4 of the “Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings.”
2. Profitability criteria for privately placed companies subsequently registering for public offering: Amendments to Paragraph 7, Article 12-1; Paragraph 5, Article 28-13; and Paragraph 7, Article 39 of the company’s “Rules Governing Review of Securities Listings.”
3. Profitability conditions for exemption from “serious decline” assessment: Amendment to Paragraph 1, Article 14 of the “Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.”
4. Profitability related to changes in management control and conditions for resumption of trading: Amendments have been made to Subparagraph 15, Paragraph 2, Article 49; Subparagraph 13, Paragraph 2, Article 49-4; Item 1, Subparagraph 13, and Subparagraph 14, Paragraph 2, Article 50; Item 1, Subparagraph 12, and Subparagraph 13, Paragraph 2, Article 50-9, of the “Operating Rules of the Taiwan Stock Exchange Corporation.” Additionally, companies undergoing a change in control and a material change in business scope are required to report, by the end of each month, the ratio of pre-tax net income to net worth for the preceding month. Correspondingly, an amendment has been made to the latter part of Subparagraph 30, Paragraph 1, Article 3 of the “Taiwan Stock Exchange Corporation Rules Governing Information Filing by Companies with TWSE Listed Securities and Offshore Fund Institutions with TWSE Listed Offshore Exchange-Traded Funds.”

In addition, when an issuing company applies for listing, any completed or ongoing capital increases through the issuance of new shares must be included in the paid-in capital reported in the financial statements for each year when calculating profitability. In response to the amendments to the profitability and financial ratio standards, for companies issuing no-par value shares or shares with a par value other than NT$10, the amount of capital increase shall be included in net worth when calculating profitability. Accordingly, Subparagraph 5, Paragraph 1, Article 9 of the “Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings” has been amended.

(II)  “Share Capital” for No-par Value Shares or Shares with a Par Value Other than NT$10 is Clearly Defined as “Share Capital Plus Capital Surplus-Issuance Premium”

For companies applying for listing under the technology, cultural and creative industries, or companies with multiple listing conditions, which refer to large enterprises with market capitalization and revenue that meet specified thresholds, the most recent financial statements’ net worth must not be less than two-thirds of the share capital reported in the financial statements. This requirement aims to prevent a company’s securities from being reclassified as subject to altered trading methods due to sustained losses after listing. Therefore, it is necessary to establish clear calculation standards for the “share capital” of companies with no par value shares and those with a par value per share not equal to $10.

With reference to the regulations of the competent authority and the definition of “share capital” for companies with no-par value shares or shares with a par value other than NT$10 under the “Operating Rules of the Taiwan Stock Exchange Corporation,” Paragraph 3 has been added to Article 6-2 of the “Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.” It stipulates that, for such companies or foreign issuers, “share capital” refers to the sum of share capital plus capital surplus-issuance premium.

(III) Amendments Related to Routine and Exceptional Financial Management, Review Selection Criteria for Listed Company Financial Reports, and Industry Classification Adjustments

Adopting the company’s post-listing supervisory standards for companies with no-par value shares or shares with a par value other than $10, amendments have been made to the “Taiwan Stock Exchange Corporation Procedures for Routine Regulation and Regulation by Exception Over Financial and Business Affairs of Listed Companies” and the “Taiwan Stock Exchange Corporation Procedures for Review of Financial Reports of Listed Companies.” The relevant financial ratios for companies with no-par value shares or a par value per share not equal to NT$10 shall be calculated based on the principle of “substituting net worth for share capital and calculating ratios at half the value.” In addition, when the company conducts its annual adjustment of listed companies’ industry classifications, the same principle shall be applied. Accordingly, Paragraph 2, Article 5 of the “Taiwan Stock Exchange Corporation Key Points for Classifying and Adjusting Categories of Industries of Listed Companies.”

Background of Amendment

In 2015, the TWSE established listing requirements for sustainable venture capital companies, setting a capital threshold of $2 billion based on the number of venture capital firms and their paid-in capital at that time. In response to the government’s policy to position Taiwan as an “Asian Asset Management Hub” and to promote the strategy of “expanding investment in venture capital and startups,” these amendments aim to enhance the ability of venture capital companies to raise funds from the capital market, thereby supporting the development of domestic startups. The key points of these amendments are summarized as follows:

(I)  Reduction of the Paid-in Capital Threshold for Initial Listing of Venture Capital Companies

To encourage venture capital companies to participate in the listing process and promote market diversity, and in response to recommendations from the Taiwan Venture Capital Association to moderately lower the listing capital threshold, this amendment reduces the paid-in capital requirement for venture capital companies from $2 billion to $1.5 billion, thereby encouraging medium-sized venture capital companies to seek listing after raising additional capital. In conjunction with this adjustment, the minimum number of common shares to be offered has been lowered from 100 million shares to 75 million shares. Accordingly, Subparagraph 2, Article 20-2 of the “Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings” has been amended.

(II) Relaxation of the Investment Amount Threshold for Initial Listing of Venture Capital Companies

Considering the practical investment operations of venture capital companies, the previous listing requirement stipulated that, at the time of application and on the dates of the financial statements for the two most recent fiscal years, the total investment amount must meet at least 60% of the applicant company’s total assets. This amendment relaxes the requirement to an “average” of 60% or more of total assets over the most recent two fiscal years, provided that the most recent fiscal year’s investment amount is higher than the preceding fiscal year’s. Companies meeting this criterion may also apply for listing. Accordingly, Subparagraph 6, Article 20-2 of the “Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings” has been amended.

(III) Addition of a Three-Year Grace Period for Post-Listing Investment Ratio Compliance

Considering that venture capital companies inherently aim to support startups over the long term and typically have longer investment evaluation periods, Item 3, Subparagraph 17, Paragraph 1, Article 49 of the “Operating Rules of the Taiwan Stock Exchange Corporation” has been amended. Under the previous rule, if a venture capital company’s most recent financial statements showed that its total investments did not reach 60% of total assets and it failed to rectify the situation within a specified period set by the TWSE, its listed securities would be reclassified as subject to altered trading methods. Under the amendment, the reclassification applies only if the company fails to meet the investment ratio requirement within the subsequent twelve financial reporting periods, providing venture capital companies with sufficient time to identify and evaluate other suitable investment targets.

For detailed information on the aforementioned regulatory amendments, please refer to the company’s announcement dated May 15, 2025 (Amendments to the Regulations Governing Listing Applications of Venture Capital Companies and relevant rules) and announcement dated June 9, 2025 (Amendments to the Profitability Criteria for Listing Applications and Post-Listing Supervision of No-Par and Flexible Par Value Companies), or access the TWSE “Rules & Regulations Directory” to view the full content of the relevant regulations.