The Study of Underwriting System on Seasoned Equity Offerings for Taiwan Listed Companies

• Main Authors: Lin, Yu-Lien, 林玉蓮
• Other Authors: Ma, Chia-Ying
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/02360083703027034120

碩士 === 東吳大學 === 會計學系 === 92 === The restriction of the Company Law and Securities and Exchange Act, listed companies can only employ the public subscription system for new issue share. There have certain percentage discount for the issue price. In such a system, listed companies are unable to raise capital for new issue shares at market price. This paper explored the American underwriting system to bring out some advice for our underwriting system. The findings were as follows: (1)Encourage listed companies or OTC listed companies to use the book building method to allocate the shares in order to reach the goal of market-price offering. To reduce investors’ payment risk, the Competent Authority should abolish Article 73 and 28-1 of the Securities and Exchange Act which prescribe that the underwriting period shall not be shorter than ten days and when a listed company or OTC listed company allocate more than 10% of the aggregate number of new shares for public offering, it should obtain a resolution adopted by its shareholders’ meeting; and modify the procedure of book building and make shares able to be traded on the next business day after pricing. (2)Encourage underwriters to underwrite securities issued by an issuer on a firm commitment basis in order to improve the underwriting efficiency and fully exert the functions of underwriters. However, the Competent Authority should promote the status of the administration rules of stabilized operation transactions, allow underwriters to conduct stabilized operation transactions when underwriting OTC listed securities and introduce the over-allotment option to reduce the risk of firm commitment of underwriters. (3)The fairness and equality of allocation by book building are important, so Chinese Securities Association should review the allocation regularly to check if there is any benefit to specific person(s) to dispel the concern of unfair allocation.