Revised Draft of Amended Articles of Regulations Governing the Administration of Shareholder Services of Public Companies Preannounced, To Be Announced and Implemented Soon
2021-02-23
The Financial Supervisory Commission (hereinafter referred to as the FSC) plans to amend the Regulations Governing the Administration of Shareholder Services of Public Companies (hereinafter referred to as the Regulations) to keep up with the amendments of the Company Act, Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies, and Taiwan Code of Civil Procedure, as well as to be in line with the measures to improve the quality and neutrality of shareholder services, and establish greater transparency in the e-voting results governed by the Corporate Governance 3.0 - Sustainable Development Roadmap (2021-2023). As the Regulations have fulfilled the preannouncement notice procedure; therefore, the official announcement and implementation of the new amendments will come into effect in a couple of days. Fifteen articles have been modified, including twelve amendments, one addition, and two deletions. The main notes are as follows:
I. Considering that it has now become a common international practice to entrust shareholder services to professional agents and that the applicability and management defined by the shareholder services units should be consistent, the Regulations stipulate that TWSE-listed, TPEx-listed, as well as emerging companies that have entrusted their shareholder services matters to shareholder services agents, may not revert the handling of their services back to an in-house manner.
II. The Regulations stipulate that the institution (i.e., Taiwan Depository & Clearing Corporation, hereinafter referred to as the TDCC) appointed by the FSC is required to carry out regular evaluation on all shareholder services institutions. The above provisions will come into effect on January 1, 2022.
III. To offer greater transparency in e-voting outcomes, companies or their shareholder services agents should compile a statistical table showing the number of shares of the shareholders that are attending the shareholder meeting via the use of electronic platforms, and disclose the said table one day prior to the shareholder meeting.
IV. The Regulations stipulate that companies which handle shareholder services via in-house and shareholder services agents, should complete the transfer of shareholder services matters within two months after being imposed a sanction by the FSC. If there are no shareholder services agents that are willing to take over as the successor, or if the FSC deems necessary, a shareholder services agent appointed by the TDCC shall take over the said position.
V. Company’s handling of matters relating to the issuance of shares given to foreign employees or employees from China has already been stipulated in relevant rules and regulations with reference to the governance of investment by foreign nationals and investors from China. The Regulations only list the main standards and principles on how to compile a shareholder list of the Collective Investment Accounts (CIA) for foreign employees or employees from China.
VI. Relevant articles have been amended to help simplify the work process and so keep up with the amendments of the Company Act, Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies, and Taiwan Code of Civil Procedure.
The core value of the newly-added shareholder services assessment system is to help ensure neutrality during the handling of shareholder services, enhance the quality of shareholder services, restore the public’s trust in shareholder services institutions, and is not a sunset clause for those companies that handle their own shareholder services. This amendment also stipulates that the FSC will only prohibit in-house shareholder services practices or block the signing of new contracts of shareholder services agents when major flaws discovered among shareholder services affairs, or when institutions fail to comply with the FSC’s requests for improvement within the given time frame. In addition, during the evaluation phase, the TDCC will provide the opportunity for companies to offer explanations for the reasons of the non-compliance, and so to present any necessary rectifications. The TDCC will also incorporate the company’s improved situation in the evaluation report. Relevant matters have already been specified in TDCC’s rules and regulations, and TDCC had fully discussed with shareholder services units.
Contact unit: Securities Trading Division, Securities and Futures Bureau
Contact Number: 02-2774-7310
If you have any questions, please write to:FSCmail
I. Considering that it has now become a common international practice to entrust shareholder services to professional agents and that the applicability and management defined by the shareholder services units should be consistent, the Regulations stipulate that TWSE-listed, TPEx-listed, as well as emerging companies that have entrusted their shareholder services matters to shareholder services agents, may not revert the handling of their services back to an in-house manner.
II. The Regulations stipulate that the institution (i.e., Taiwan Depository & Clearing Corporation, hereinafter referred to as the TDCC) appointed by the FSC is required to carry out regular evaluation on all shareholder services institutions. The above provisions will come into effect on January 1, 2022.
III. To offer greater transparency in e-voting outcomes, companies or their shareholder services agents should compile a statistical table showing the number of shares of the shareholders that are attending the shareholder meeting via the use of electronic platforms, and disclose the said table one day prior to the shareholder meeting.
IV. The Regulations stipulate that companies which handle shareholder services via in-house and shareholder services agents, should complete the transfer of shareholder services matters within two months after being imposed a sanction by the FSC. If there are no shareholder services agents that are willing to take over as the successor, or if the FSC deems necessary, a shareholder services agent appointed by the TDCC shall take over the said position.
V. Company’s handling of matters relating to the issuance of shares given to foreign employees or employees from China has already been stipulated in relevant rules and regulations with reference to the governance of investment by foreign nationals and investors from China. The Regulations only list the main standards and principles on how to compile a shareholder list of the Collective Investment Accounts (CIA) for foreign employees or employees from China.
VI. Relevant articles have been amended to help simplify the work process and so keep up with the amendments of the Company Act, Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies, and Taiwan Code of Civil Procedure.
The core value of the newly-added shareholder services assessment system is to help ensure neutrality during the handling of shareholder services, enhance the quality of shareholder services, restore the public’s trust in shareholder services institutions, and is not a sunset clause for those companies that handle their own shareholder services. This amendment also stipulates that the FSC will only prohibit in-house shareholder services practices or block the signing of new contracts of shareholder services agents when major flaws discovered among shareholder services affairs, or when institutions fail to comply with the FSC’s requests for improvement within the given time frame. In addition, during the evaluation phase, the TDCC will provide the opportunity for companies to offer explanations for the reasons of the non-compliance, and so to present any necessary rectifications. The TDCC will also incorporate the company’s improved situation in the evaluation report. Relevant matters have already been specified in TDCC’s rules and regulations, and TDCC had fully discussed with shareholder services units.
Contact unit: Securities Trading Division, Securities and Futures Bureau
Contact Number: 02-2774-7310
If you have any questions, please write to:FSCmail
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Update：
2021-03-04