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Public Companies Allowed to Hold Shareholders’ Meetings with Assistance of Video Conferencing to Support Pandemic Prevention Efforts and Facilitate the Smooth Holding of Shareholders’ Meetings

     As a necessary pandemic prevention measure, the Financial Supervisory Commission (FSC) previously reported to the Central Epidemic Command Center (CECC) for approval and announced on 20 May 2021 that all public companies should suspend the convening of shareholders’ meetings from 24 May to 30 June 2021 and postpone holding of the meetings until July to August. 
     During the pandemic, it has frequently been suggested that digital technology be employed to facilitate the holding of shareholder meetings. The FSC has considered these suggestions as well as proposals from national legislators, examined the current circumstances of the shareholders’ meeting regime in Taiwan, and held interdepartmental meetings to confer on the matter. Now, pursuant to Article 7 of the Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens (the "Special Act") and Article 37, paragraphs 1.6 and 3 of the Communicable Disease Control Act, the FSC has reported to the CECC for approval and announced that during the period from 16 August to 31 August 2021, in addition to holding physical shareholders’ meetings, public companies meeting certain conditions will be permitted to hold shareholders’ meetings with assistance of video conferencing. 
     The FSC, on 29 June 2021, announced amendments to the Measures for Public Companies to Postpone Shareholders’ Meetings for Pandemic Prevention. The period for the holding of postponed shareholder meetings (from 1 July to 31 August) remains unchanged under the amendments. Key points of the amendments are as follows:
1.  Principles for the holding of physical shareholders’ meetings with assistance of video conferencing: Considering that this year will be the first time that video conferencing assistance is allowed for shareholders’ meetings, the design of the systems required for such meetings should not be complex. In addition, Taiwan's shareholders’ meeting differs in certain aspects and customs from other countries such as quorums, cumulative voting, extemporary motions, and proxies. In consideration of all these factors, the period during which companies will be allowed to hold such meetings has been set for 16 August to 31 August 2021, and such meetings are to be conducted in the manner described below:
 (1)  Video conferencing platform: Taiwan Depository & Clearing Corporation (TDCC) has already successfully implemented a shareholders’ meeting e-voting platform for many years. TDCC is therefore being tasked with providing the platform for such meetings. Companies that choose to hold shareholders’ meeting with the assistance of video conferencing should follow TDCC's guidelines for implementation of physical shareholders’ meetings with assistance of video conferencing.
 (2)  Extemporary motions and amendments to the content of the original meeting proposals: In practice internationally, it generally is not permitted in virtual shareholders’ meetings to raise extemporary motions or to amend the content of the original meeting proposals. In line with this, a shareholder wishing to attend a shareholders’ meeting of a Taiwanese public company by videoconference will be required to register such attendance with the company in advance, and to agree to waive their voting power in respect of any extemporary motion or any amendment to the contents of an original proposal at the shareholders’ meeting, and to agree to forego participation at the physical shareholders’ meeting. 
 (3) Shareholders adopting electronic voting participating shareholders’ meeting by video:  Considering system stability and the smooth participation by those shareholders who have not yet voted and who will be attending the shareholders’ meeting by vedio, shareholders who have already voted electronically—because their attendance and votes at the shareholders’ meeting will have already been counted—will not be allowed to participate by videoconference in the shareholders’ meeting. They may, however, still attend and speak at the physical shareholders’ meeting. TDCC, in its Guidelines for the video conferencing assisted shareholders’ meetings, will specifically require companies that plan to hold such meetings to provide channels for shareholders adopting electronic voting to raise related questions before the meeting and receive answers from the company, to safeguard the interests of shareholders. 
 (4) A public company that intends to hold a shareholders’ meeting with the assistance of video conferencing must meet the following conditions: 
A. There will not be any proposal for election of directors or supervisors at the general meeting of shareholders, or if there is a proposal for election of directors or supervisors, the number of candidates does not exceed the number of seats to be filled. 
B. There will not be any proposal for discharge         of a director or supervisor at the general meeting. 
C. If the company's stock is neither listed nor traded over the counter, it must have outsourced its shareholder services to a professional shareholder services agency. 
2.  Instead of mailing notices of postponement of shareholders’ meetings as before, companies will now be required to make a public announcement of postponement: In response to changing circumstances due to the pandemic, companies may need to hold new board meetings to resolve on changes to matters such as the method or date for holding a shareholders’ meeting. Furthermore, public companies have vast numbers of shareholders, so printing new paper notices would be time-consuming and create extra cost, as well as contradicting the spirit of reducing energy consumption and carbon emissions and raising the risk of infection in the postal delivery process. Based on these considerations, the FSC has amended the former requirement that a company mail a postcard or other light mail item to notify all shareholders of a shareholders’ meeting and also post an announcement on the Market Observation Post system by 15 days before the meeting. Under the amendment, companies are now required only to post the announcement as material information on the Market Observation Post System and to update the relevant information on the shareholders’ meeting pages of Market Observation Post System. All companies, shareholder services agencies, and securities firms are also urged, however, to use diverse channels to bring the latest information about meetings to the attention of shareholders. For example, they can post the information on dedicated sections of their websites and transmit it through securities firms' stock trading apps and TDCC's ePASSBOOK app. 
3.  Numbers of people allowed to attend physical shareholders’ meetings: Some companies and shareholder service agencies have remarked that it can be difficult finding suitable venues for shareholders’ meetings under the circumstances of the pandemic and that some shareholders still wish to attend the physical meetings. It should be noted that holding shareholders’ meetings is a legal obligation of public companies. Although eligible companies are now permitted to hold shareholders’ meetings with the assistance of video conferencing, they may not forego the holding of the physical shareholders’ meeting. To prevent Covid-19 clusters and facilitate pandemic prevention efforts under the Covid Level 3 alert, the number of people allowed in physical shareholders’ meeting venues will be limited to less than 20 people in any indoor venue and less than 40 people at any outdoor venue. Companies furthermore must comply with the CECC’s pandemic prevention measures and related directions. The FSC has also called on TDCC to incorporate strengthened pandemic prevention measures in TDCC's Operating Guidelines for Pandemic Prevention for Shareholders Meetings Held Under the Covid-19 Level 3 Alert.
4.  Cooperation by Related Self-Regulatory Organizations:
 (1) The Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEx) are responsible for forwarding the content of announcements by the FSC to all TWSE listed companies, TPEx listed companies, Emerging Stock companies, and public companies, and providing guidance to the companies on matters related to conducting the postponed shareholders’ meetings. 
 (2) The TWSE, TPEx, and TDCC are drawing up lists of frequently asked questions and answers (Q&A) of concern to the public regarding related matters and will post them on their websites as soon as possible. 
 (3) TDCC will publish its Operating Guidelines for the holding of video conferencing assisted shareholders’ meetings as soon as possible. Before the video conferencing platform for such meetings goes online, TDCC will conduct system tests with public companies and shareholder services agencies. It will also take steps to raise public awareness of the system and set up a consultation window, to familiarize the public with the related rules and operational procedures as swiftly as possible, to ensure the shareholders’ meetings can be conducted smoothly. 
     The FSC appeals to all companies, investors, and market participants to cooperate and work together in this difficult time of the pandemic, to ensure the smooth and successful holding of shareholders’ meetings. The latest announcements and information related to pandemic prevention can be found on the COVID-19 Pandemic Prevention Response Measures page on the website of the FSC Securities and Futures Bureau
Investors may also refer to the Market Observation Post System website and the websites of the companies themselves for further information relating to the postponed shareholders’ meetings.

Point of Contact: Mr. Chen, Section Chief, Securities Trading Division, Securities and Futures Bureau
Tel: 02-2774-7310

For any questions, please e-mail to: FSCMAIL
Visitor: 444   Update: 2021-07-13
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