1. Order Issued Under the Proviso to Article 10 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companie
On 11 November 2016, the Financial Supervisory Commission (FSC) issued Order No. Financial-Supervisory-Securities- Corporate-1050044504 and repealed 19 January 2007 Order No. Financial-Supervisory-Securities-I-09600014631. The new order expands the scope of securities that may be acquired or disposed of by a public company without the requirements of obtaining financial statements of the issuing company and an opinion on the reasonableness of the transaction price provided by a certified public accountant. The expanded scope extends to the following securities: 1. corporate bonds (including financial bonds) that are subscribed domestically and are not privately placed; 2. securities acquired through cash contribution in an incorporation by promotion or public offering in accordance with the Company Act, with the further requirement that the rights represented by the acquired securities be commensurate with the proportion of capital contributed.
2. On 19 December 2016, the FSC published amendments of the Regulations Governing the Preparation of Financial Reports by Securities Issuers in coordination with the IFRSs adopted in 2017
On 19 December 2016, the FSC published the amendment of the Regulations Governing the Preparation of Financial Reports by Securities Issuers in response to the IFRSs as endorsed in 2017 and the post-implementation review of IFRSs (amending six articles, adding two new articles, and deleting one article). The main amendment consists of adding the classification of non-current assets (or disposal groups) as held for distribution to owners, including bearer plants within “property, plant, and equipment”, regulating the methods of asset depreciation and amortization, specifying the disclosure requirements on impairment assessment of non-financial assets, revising provisions on revenue recognition and measurement, enhancing the disclosure of related party transactions, and updating the accounting treatment of business mergers and acquisitions and the goodwill impairment evaluation.
3. Provisions Amended Regarding Futures Commission Merchants’ Use of Their Own Funds
Considering that the business of futures commission merchants (FCMs) is, in part, related to that of the Taiwan Depository & Clearing Corporation, and to afford FCMs greater flexibility in the use of their proprietary funds, the FSC on 1 December 2016 issued deregulatory measures to allow FCMs to invest in the centralized securities depository enterprise.
4. Scope Relaxed for Securities Finance Enterprises’ Use of Their Own Funds
The FSC on 30 November 2016 issued that securities finance enterprises are permitted to invest their proprietary funds in TWSE and TPEx listed corporate bonds and foreign currency denominated international bonds. This measure will help securities finance enterprises use their funds more efficiently and diversify their bond investment portfolios.
5. The FSC Announces that Multi-Asset Funds can Invest in High-Yield Bonds; Fund Managers Allowed to Concurrently Manage Balanced Funds and Multi-Asset Funds
To make Taiwan’s investment trust enterprises more competitive and enable investment trust funds to operate more flexibly, the FSC announces that a multi-asset fund can invest in high-yield bonds at most 30% of net asset value of the fund and that a manager of a balanced fund can concurrently manage a multi-asset fund and vice versa on December 1, 2016.
6. Order Issued under Article 18, Paragraph 1, Subparagraph 4 of the Regulations Governing Securities Firms to Support the Promotion of Systematic Investment Plans for Individual Stocks and ETFs
To support securities firms offering their customers systematic investment plans (investments made in periodic fixed amounts) for individual stocks and ETFs, the FSC on 19 December 2016 eased restrictions so as to allow securities firms to use their own funds to open special trading accounts for TWSE and TPEx listed stocks, for purposes of regulating odd-lot shares. The FSC amended provisions relating to investment in TWSE and TPEx listed stocks by securities firms engaged exclusively in brokerage business, as well as provisions relating to securities firms’ use of their own funds when engaging in proprietary trading business.