Important Measure October 2022
2022-12-19
1. To strengthen management of the operations of securities firms and futures commission merchants and strengthen corporate governance, the Financial Supervisory Commission (FSC) amended the Regulations Governing Responsible Persons and Associated Persons of Securities Firms and the Regulations Governing Responsible Persons and Associated Persons of Futures Commission Merchants. Key points of the amendments are as follows: (2022/10/28)
(1) To strengthen management of the operations of securities firms and futures commission merchants (FCMs) and enhance the professional abilities of the chairman of the board, the amended regulations require that the chairman has good moral character and effective leadership and management capabilities and has a certain level of education and relevant work experience at securities, futures, or financial institutions.
(2) To strengthen corporate governance, the amendment places on the board of directors the responsibility of selecting and supervising managers and supervising the company to implement the accountability of managers and establish related systems.
(3) To prevent the responsible persons of securities firms and FCMs from holding concurrent positions that could detract from the effective performance of their duties or cause conflicts of interest, the amendment adds self-regulatory provisions requiring securities firms and futures commission merchants to regularly assess their responsible persons’ holding of concurrent positions and determine whether changes should be made thereto.
(4) To control conflicts of interest arising from persons holding concurrent positions at different financial institutions, the subjects regulated by non-competition provisions are expanded from the responsible persons themselves including their related parties.
2. FSC relaxes the Directions on the Conduct of Wealth Management Business by Securities Firms and allows firms to provide and execute asset allocation for money and securities by means of a trust, and requires securities firms to establish internal accountability systems (2022/10/27)
To enhance the services offered by securities firms concurrently operating trust business and to facilitate greater participation in trust business by securities firms, the FSC amended certain provisions of the Directions for the Conduct of Wealth Management Business by Securities Firms on 7 November 2022. The amendment eases the former restriction under which securities firms were permitted only to provide simple investment trust products for customers, to the extent that securities firms now are allowed to provide and execute various trust products under money and securities trusts according to the needs of their clients. On the same day, the FSC also amended the Q&A of the Directions for the Conduct of Wealth Management Business by Securities Firms, simplifying relevant application procedures and requiring securities firms conducting trust business to introduce accountability systems. When necessary (e.g., when an examination report reveals deficiencies, or when there is a spike in customer complaint cases), the FSC may require the head of a securities firm’s department handling trust and wealth management business to come to the FSC’s office for an interview. Furthermore, in the event of a breach by a securities firm, the persons responsible will be held accountable in order to strengthen corporate governance and the implementation of the internal control system.
(1) To strengthen management of the operations of securities firms and futures commission merchants (FCMs) and enhance the professional abilities of the chairman of the board, the amended regulations require that the chairman has good moral character and effective leadership and management capabilities and has a certain level of education and relevant work experience at securities, futures, or financial institutions.
(2) To strengthen corporate governance, the amendment places on the board of directors the responsibility of selecting and supervising managers and supervising the company to implement the accountability of managers and establish related systems.
(3) To prevent the responsible persons of securities firms and FCMs from holding concurrent positions that could detract from the effective performance of their duties or cause conflicts of interest, the amendment adds self-regulatory provisions requiring securities firms and futures commission merchants to regularly assess their responsible persons’ holding of concurrent positions and determine whether changes should be made thereto.
(4) To control conflicts of interest arising from persons holding concurrent positions at different financial institutions, the subjects regulated by non-competition provisions are expanded from the responsible persons themselves including their related parties.
2. FSC relaxes the Directions on the Conduct of Wealth Management Business by Securities Firms and allows firms to provide and execute asset allocation for money and securities by means of a trust, and requires securities firms to establish internal accountability systems (2022/10/27)
To enhance the services offered by securities firms concurrently operating trust business and to facilitate greater participation in trust business by securities firms, the FSC amended certain provisions of the Directions for the Conduct of Wealth Management Business by Securities Firms on 7 November 2022. The amendment eases the former restriction under which securities firms were permitted only to provide simple investment trust products for customers, to the extent that securities firms now are allowed to provide and execute various trust products under money and securities trusts according to the needs of their clients. On the same day, the FSC also amended the Q&A of the Directions for the Conduct of Wealth Management Business by Securities Firms, simplifying relevant application procedures and requiring securities firms conducting trust business to introduce accountability systems. When necessary (e.g., when an examination report reveals deficiencies, or when there is a spike in customer complaint cases), the FSC may require the head of a securities firm’s department handling trust and wealth management business to come to the FSC’s office for an interview. Furthermore, in the event of a breach by a securities firm, the persons responsible will be held accountable in order to strengthen corporate governance and the implementation of the internal control system.
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2022-12-19