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The introduction to the Emerging Stock Market

The Taipei Exchange (TPEx) established the Emerging Stock Board (ESB) in the year of 2002, which originally aimed to address the problems with illegal trading of private stocks. Nowadays, ESB has developed as a preliminary market before IPO, playing an important role in the capital market. Registering on ESB can help companies to become familiar with laws and regulations related to the securities market, to raise their profile and visibility, and to discover reasonable share prices in IPO procedures. Moreover, ESB helps nurture emerging enterprises with good potential in the way of incorporating with advisory role of recommending securities firms. With the required advising and counseling during registration period, the ESB companies make improvement in the quality of their internal control system and compliances.

In support of the innovative companies to enter into capital market, TPEx launched Pioneer Stock Board (PSB) in Q3 2021 and formed the former ESB into PSB together with Emerging Stock Market (ESM). Enterprises applied for registering on PSB could adopt simplified public issuing procedure which was favorable for them in their journey to the capital market.

To improve ESM and create a more friendly market environment, TPEx consolidated PSB and ESB which make ESM back to one single board. The new change of ESM came into effect from 1 January 2024.

Concerning the above mentioned simplified public issuing procedure helped enterprises reducing the preliminary costs and time for going public, non-public enterprises (either domestic or foreign)could apply for ESB registration and summit the filing documentation for public issuing (including general public issuing and simplified public issuing) at the same time from the year 2024. The market structure shows as below:

The market structure

3 ways to apply for registering on ESB:

Application Entity	Public Companies	Non-Public Companies
Application Procedure	Enterprises complete the general public issuing procedure before applying for registering on ESB.	The application for ESB registration and filings for general public issuing can be submitted to TPEx at the same time.	The application for ESB registration and filings for simplified public issuing can be submitted to TPEx at the same time.
Registration criterion	No requirements on duration of corporate existence, profitability, and shareholding dispersion.
Applicable industries	No specific industries
Review procedure	Documentation review
Difference between filing documents for public issuing	2 Financial Reports (covering 3 Years of financial information) 1 Year internal control system audit report	2 Financial Reports (covering 3 Years of financial information) 1 Year internal control system audit report	1 Financial Report (covering 2 Years of financial information) Half-year internal control system audit report ( covering only important operational cycles and activities)
Advisory recommending securities firm(RSF)	Registrants must have written recommendations by two or more advisory recommending securities firms (one of which is designated as the lead RSF and the others are co- RSFs). The RSFs must subscribe for the registered common stocks of the issuer at the amount of 3% or above, and no less than 500,000 shares.
Restriction on investors	None
Trading mechanism	Negotiated trading based on prices quoted by recommending securities firms No daily price fluctuation limit