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The FSC Announces Partial Amendments to the Articles of the “Securities Investor and Futures Trader Protection Act” to Promote Corporate Governance and Improve Investor Protection

2023-05-09
To further improve the legal regulatory system for representative actions and discharge actions, promote corporate governance, and notify interest groups of the handling of litigation judgments , the Financial Supervisory Commission (FSC) plans to amend the "Securities Investor and Futures Trader Protection Act" while taking into account that most of the relevant lawsuits filed by the Securities Investor and Futures Investor Protection Center (hereinafter referred to as the Investor Protection Center) under the "Securities Investor and Futures Trader Protection Act" are reviewed by the intellectual property and commerce courts following the implementation of the Commercial Case Adjudication Act on July 1, 2021, as well as how the Investor Protection Center needs to expand its funding sources to meet the needs of future business development in the face of the expanded breadth and depth of relevant litigation and the increasing burden of proof. 
 
The four amended articles are highlighted as follows:
I.    Improving the standards for representative actions and discharge actions, strengthening business operations’ ethics, promote the implementation of corporate governance , and expanding the responsibility of the protection institution to initiate representative actions and discharge actions, including illegal activities such as securities fraud, unconventional trading, embezzlement, and breach of trust by company directors or supervisors engaged in untrue financial reports or public prospectuses (amendment to Article 10-1).
II.    Relaxing the restrictions on the expenditure and expenses of the Investor Protection Center in carrying out business and adding the total amount of the accumulated funds transferred back from the balance of the protection fund’s interest after paying business expenses, which will also serve as a source of funding for the protection institution to meet future business development needs (amendment to Article 20).
III.    Method of notifying investors of judgment results: if a case is successful or an appeal is filed for the case, the written notice shall be replaced by a public announcement; When no appeal is filed, the Investor Protection Center needs to provide a written notice within 7 days after accepting the original judgment for the protection of the rights and interests of the authorizer (amendment to Article 32).
IV.    For clarification purposes, it is stipulated that the amendments to the Act after their implementation shall apply to representative actions and discharge actions already initiated by the Investor Protection Center which are not yet concluded. (Amendment to Article 40-1).

The FSC notes that the general description of the draft and a comparison table of the amended articles will be published on the FSC website. Should you have any feedback, please visit the “Advance Notice of Draft Regulations” webpage on the “Integrated Query System of Regulations Under the Governance of the Commission” website (http://law.fsc.gov.tw/) and provide your feedback therein, or contact the Securities and Futures Bureau of the FSC within 30 days from the date of the announcement.

Contact unit:    Securities Trading Group, Securities and Futures Bureau
Tel: (02) 2774-7130
If you have any questions, please write in to: FSCMAIL
Visitor: 1139   Update: 2023-05-17
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