Important Measure May 2023
2023-07-14
1. Legislative Yuan Passed Draft Amendment to Articles 14-4, 181-2, 14-5, and 178 of the Securities and Exchange Act on Third Reading on 30 May 2023
On 30 May 2023, the Legislative Yuan passed on the third reading a draft bill submitted by the Executive Yuan of proposed amendments to the above-cited articles of the Securities and Exchange Act. Key points of the amendment are as follows:
(1) Because the filing of lawsuits against directors, the convening of shareholder meetings, and the matter of who acts as representative when a director engages in his/her own dealings with the company are important matters for a company which should be fully discussed by the audit committee, the amendment requires that these matters be deliberated by the audit committee. (Amendments to Articles 14-4 and 181-2)
(2) Considering possible situations in which a company has legitimate reasons for being unable to hold an audit committee meeting, in order to avoid any impact on the company’s operations, it is added that the proposals for the audit committee’s resolution in such a situation should be approved through a special resolution by all the directors; however, in the case of financial reporting matters when such matters are submitted to the board meeting, the independent directors’ consent must still be provided so that the responsibilities of the audit committee members are fulfilled. In addition, related penalty provisions are added to further urge companies to fully implement the administrative management objectives of corporate governance. (Amendments to Articles 14-5 and 178)
2. Legislative Yuan Passed Draft Amendment to Articles 70-1 and 113-1 of the Securities Investment Trust and Consulting Act on Third Reading on 30 May 2023
On 30 May 2023, the Legislative Yuan passed on the third reading a draft bill submitted by the Executive Yuan of proposed amendments to Articles 70-1 and 113-1 of the Securities Investment Trust and Consulting Act. Key points of the amendment are as follows:
(1) The amendment prohibits any entity that is not a securities investment trust enterprise (SITE) or a securities investment consulting enterprise (SICE) from engaging in certain types of advertising. It also requires internet platform providers and other internet communication media enterprises to disclose information on the publisher and sponsor of related advertisements that they publish or broadcast and prohibits the publishing or broadcasting of advertisements that violate the law. If an internet media enterprise discovers that an advertisement is in violation after it has been published or broadcast, the enterprise is required, at its own initiative or within a deadline as notified by relevant law enforcement agencies, to remove the advertisement, restrict browsing of it, cease its broadcast, or take other necessary measures. In such cases, the internet platform provider or other internet media enterprise will be held jointly and severally liable with the publisher and sponsor of the advertisement for damages.
(2) The amendment also provides that if an internet platform provider or other internet communication media enterprise is notified to remove an advertisement, restrict browsing of it, cease its broadcast, or take other necessary measures and fails to do so by the deadline, the law enforcement agency that notified the internet enterprise to take down the advertisement may impose an administrative fine on the enterprise and order it to make corrections within a deadline.
On 30 May 2023, the Legislative Yuan passed on the third reading a draft bill submitted by the Executive Yuan of proposed amendments to the above-cited articles of the Securities and Exchange Act. Key points of the amendment are as follows:
(1) Because the filing of lawsuits against directors, the convening of shareholder meetings, and the matter of who acts as representative when a director engages in his/her own dealings with the company are important matters for a company which should be fully discussed by the audit committee, the amendment requires that these matters be deliberated by the audit committee. (Amendments to Articles 14-4 and 181-2)
(2) Considering possible situations in which a company has legitimate reasons for being unable to hold an audit committee meeting, in order to avoid any impact on the company’s operations, it is added that the proposals for the audit committee’s resolution in such a situation should be approved through a special resolution by all the directors; however, in the case of financial reporting matters when such matters are submitted to the board meeting, the independent directors’ consent must still be provided so that the responsibilities of the audit committee members are fulfilled. In addition, related penalty provisions are added to further urge companies to fully implement the administrative management objectives of corporate governance. (Amendments to Articles 14-5 and 178)
2. Legislative Yuan Passed Draft Amendment to Articles 70-1 and 113-1 of the Securities Investment Trust and Consulting Act on Third Reading on 30 May 2023
On 30 May 2023, the Legislative Yuan passed on the third reading a draft bill submitted by the Executive Yuan of proposed amendments to Articles 70-1 and 113-1 of the Securities Investment Trust and Consulting Act. Key points of the amendment are as follows:
(1) The amendment prohibits any entity that is not a securities investment trust enterprise (SITE) or a securities investment consulting enterprise (SICE) from engaging in certain types of advertising. It also requires internet platform providers and other internet communication media enterprises to disclose information on the publisher and sponsor of related advertisements that they publish or broadcast and prohibits the publishing or broadcasting of advertisements that violate the law. If an internet media enterprise discovers that an advertisement is in violation after it has been published or broadcast, the enterprise is required, at its own initiative or within a deadline as notified by relevant law enforcement agencies, to remove the advertisement, restrict browsing of it, cease its broadcast, or take other necessary measures. In such cases, the internet platform provider or other internet media enterprise will be held jointly and severally liable with the publisher and sponsor of the advertisement for damages.
(2) The amendment also provides that if an internet platform provider or other internet communication media enterprise is notified to remove an advertisement, restrict browsing of it, cease its broadcast, or take other necessary measures and fails to do so by the deadline, the law enforcement agency that notified the internet enterprise to take down the advertisement may impose an administrative fine on the enterprise and order it to make corrections within a deadline.
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588
Update：
2023-10-12