Taipei-Financial Supervisory Commission (FSC) Chairman Wellington Koo said on Tuesday that the FSC is planning to ease rules on stock listings for enterprises by the end of the first quarter.
Speaking at a forum on investing in Taiwan, Koo said in the future even if a company incurs losses, as long as its net worth or market value meets certain requirements, it will still be able to seek a listing on the main board or the over-the-counter market.
Koo said the Taiwan Stock Exchange (TWSE), which operates the local main board, and the Taipei Exchange (TPEx), which runs the OTC market, are revising their regulations on share listings to promote greater market openness.
Koo added that the liberalization, which is expected to take effect by the end of this quarter, is part of the FSC's efforts to diversify stock listing requirements in a bid to allow enterprises to gain easier access to funding.
Currently, enterprises have to meet certain profitability requirements before they can file an application for a stock listing. Alternatively, a loss incurring biotech company for example, needs a green light from the government agency supervising the firm's operations to seek a listing.
The FSC now plans to introduce a third method for a stock listing whereby a company with paid-in capital of NT$600 million (US$20.34 million) and market value of NT$5 billion is allowed to apply for a listing on the main board, Chang Cheng-shan, deputy director of the FSC's Securities and Futures Bureau, told the press.
The new method requires a company to have a net worth of NT$600 million before seeking a stock listing on the OTC market, Chang said.
According to the FSC, this change is expected to encourage small-sized e-commerce operators to seek funding on the equity market.
Chang said after the TWSE and TPEx complete their revisions of related regulations, more small-sized good quality firms are expected to join the local capital market by the end of this quarter.
Meanwhile, Chang said the goal is to list 30 companies on the main board, 30 on the OTC market and an additional 35 on the emerging market by the end of this year.
Chang said some deferred listings from last year delayed by foreign exchange risk considerations are expected to boost the number of new listings to more than 100, including about 40 on the emerging market, this year.
According to Taiwan's listing rules, a company needs to list its shares on the emerging market for no less than six months before it can seek a listing on the main board or the OTC market.
At the end of last year, 907 companies were listed on the main board and 744 on the OTC market.
Source: Overseas Community Affairs Council