New Investment Tool in Capital Market - Innovation Board

        2023 can be regarded as a fruitful year for listing on the Innovation Board, such as: Sunac Technology, Tigerair Taiwan, Yunbao Energy, Honghua Advanced under the Hon Hai Group, Hongde Energy, the "Uber" in the energy industry, Gogolook, the developer of the unfamiliar call recognition software, as well as Acer subsidiary Yitian Kuqi, Apple Giant Armor Precision in the automotive light modification industry, Jin Wanlin from the "Biotechnology National Team", and Zhenghan, a green agriculture manufacturer, They are all part of the innovation board. Are you curious about the existence of "listed cabinets" and "emerging cabinets" in the investment market, why is the "Innovation Board" still established? How should investors participate? Follow this issue of the Finance Column to grasp the key information of the Innovation Board.

        Innovation Board - Taiwan Unicorn

                In order to align with international standards, implement government policies, and promote industrial transformation, Taiwan Stock Exchange Corporation (hereinafter referred to as the "Stock Exchange") launched the "Taiwan Innovation Board" (TIB) in the third quarter of 2021, aiming to assist potential new innovation teams in having more opportunities to be discovered and as a key core technology A multi-level equity financing platform for new startups with innovative capabilities or business models, such as Internet of Things (IoT), artificial intelligence, Big Data, and other new technology applications. On the other hand, for investors, investing in new startups is no longer a patent of venture capital, as long as specific conditions are met, they can trade stocks on the Innovation Board.

        How to participate in the innovation board

        1、 Investors:

        Considering that many startups are in the development stage and require higher risks than general publicly quoted entities, the Stock Exchange only allows qualified investors who meet one of the following conditions to invest in order to protect investors:

        Professional institutional investors or legal entities with more than one year of experience in securities trading and investment.

        A venture capital enterprise established in accordance with the law.

        The legal entity that obtained the initial listing of securities on the Innovation Board through negotiation and sales methods.

        Individual investors are most concerned about whether they can participate in investment? If a qualified investor is a "natural person", they must have at least two years of securities trading experience and provide "proof of financial strength of NTD 2 million or more" or "average income of NTD 1 million in the past two years". In addition, before purchasing stocks listed on the Innovation Board for the first time, a dedicated person must explain and sign a "risk warning letter".

        2、 Trading system:

        1. Trading unit: 1000 shares.

        2. Trading hours: 9:00~13:00

        3. Rise and fall range: On the first five days of listing, there is no limit on the rise and fall range. Afterwards, it will be listed on the general board and maintain a 10% limit on the rise and fall range.

        4. Zero share trading: Zero share trading is allowed after hours, but not during hours.

        5. Restrictions: Do not engage in hedging, credit trading, or borrowing securities. (It is expected that credit and securities lending transactions will be opened from 2024 onwards)

        6. Termination of Listing Regulations: The average closing price for 30 consecutive trading days is lower than NTD3, or the average stock market value for 30 consecutive trading days is lower than NTD1 billion.

        matters needing attention

        Before trading stocks on the Innovation Board, in addition to carefully evaluating one's own financial ability and economic situation, it is also necessary to understand their potential risks and pay special attention to the following matters:

        1. Companies listed on the Innovation Board usually have smaller capital, shorter establishment periods, and no profit margin standards.

        2. These securities may have liquidity risk.

        3. When buying and selling stocks of the first listed company (KY) on the Innovation Board, attention should be paid to the place of registration of its issuing company. If it is in a foreign country, in addition to being regulated by local regulations, it may also bear the risk of changes in the political and economic environment, society, industrial cycles, and legal compliance of the country where it operates.

        Qualified investors are welcome to prepare proof documents and sign the "Risk Notice" at the securities firm where the account is opened, in order to start searching for the next guardian mountain in the new innovation park. However, investing is not gambling. Please make sure to spend more time researching the prospects of the enterprise and carefully evaluate and think before making an investment!

        *Image source: freepik

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