The Preannouncement Procedure of the Draft Amendments to Some Clauses of Regulations Governing the Administration of Shareholder Services of Public Companies and Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies has been completed and the Amendment will be Published shortly
2022-03-03
To bring practice into line with the Company Act, which allows public companies to convene virtual shareholders’ meetings, the Regulations Governing the Administration of Shareholder Services of Public Companies and Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies have been amended after reviewing foreign systems, local experience in physical shareholders’ meetings with assistance of video conferencing amid pandemic, and shareholders’ meeting practical operation. The preannouncement period of the relevant clauses has ended, so they will be promulgated and implemented shortly. It is expected to be conducive to better shareholder activism.
The summarized important aspects of amendments to the Regulations Governing the Administration of Shareholder Services of Public Companies and Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies are as follows:
I. To better meet pandemic prevention measures and practical needs, public companies are now allowed to convene hybrid meetings (i.e. physical shareholders’ meetings with assistance of video conferencing) and virtual-only meetings (i.e. 100% virtual shareholders’ meetings with no physical meetings).
II. To ensure shareholders’ rights, it is explicitly stipulated that if companies plan to convene virtual meetings, including virtual-only and hybrid shareholders’ meetings, they must have it written in their articles of incorporation and approved by their board of directors. In the event of natural disasters, incidents, or other force majeure, the Ministry of Economic Affairs (MOEA) may announce that companies may not need to have the said types of meetings written in their articles of incorporation within a specified period. In addition, since hybrid meetings can help protect shareholders’ rights, hybrid meetings approved by special resolutions at the board of directors meetings will be exempted from the said articles of incorporation restrictions within one year after adopting the revised regulations. Those cases with special resolutions will be exempted from the said articles of incorporation restrictions.
III. Companies that plan to convene virtual-only shareholders’ meetings should meet the following requirements:
(i) Shareholders’ meetings do not have motions to elect directors and/or supervisors.
(ii) Shareholders’ meetings do not have motions to dismiss directors and/or supervisors.
(iii) Shareholders’ meetings do not have motions stipulated in Article 185 and 316 of the Company Act, Article 18, 27, 29 and 35 of the Business Mergers And Acquisitions Act, or Article 24 Paragraph 2 Item 1 and Article 26 Paragraph 2 Item 1 of the Financial Holding Company Act (i.e. major mergers and acquisitions).
(iv) Companies whose stocks are not listed on the stock exchange or traded on the over-the-counter (OTC) market should outsource shareholder services agencies to handle their shareholder services.
IV. Companies that plan to convene hybrid shareholders’ meetings should meet the following requirements:
(i) Shareholders’ meetings do not have motions to elect directors and/or supervisors, or if they do, the number of the candidates should not exceed the quota of the directors and supervisors to be elected.
(ii) Shareholders’ meetings do not have motions to dismiss directors and/or supervisors.
(iii) Companies whose stocks are not listed on the stock exchange or traded on the OTC market should outsource shareholder services agencies to handle their shareholder services.
V. To ensure the secure and neutral nature of the virtual communications deployed for shareholders’ meetings, providers of virtual meeting platforms should meet related requirements and should report to and be examined by the Financial Supervisory Commission (FSC) before they commence their work.
VI. To ensure shareholders understand the relevant rights and limitations of participating in shareholders’ meetings, it is explicitly stipulated that the meeting notice should include shareholders’ participation methods and ways of exercising their rights, countermeasures against virtual meeting and platform failures caused by natural disasters, incidents, or other force majeure events, as well as proper alternative measures for shareholders who have difficulty attending shareholders’ meetings virtually.
VII. To reflect the diversity of shareholders’ attendance at or participation in shareholders’ meetings, relevant procedures should be formulated, including circumstances where shareholders, solicitors, and proxy agents register for online attendance, where shareholders have registered for attending shareholders’ meetings virtually but wish to attend physically, and where shareholders have exercised their voting right via written or electronic means but wish to attend shareholders’ meetings virtually.
VIII. To safeguard shareholders’ rights, it is explicitly stipulated that shareholders who have exercised their voting right via written or electronic means and haven’t withdrawn their declaration of intent may still attend shareholders’ meetings virtually. However, they can only exercise their proposing and voting rights regarding extempore motions. In addition, they cannot vote on the original meeting proposals and the amendments to the content of the original meeting proposals, or propose to amend the content of the original meeting proposals.
IX. Considering that the participation procedures of virtual meetings and the results of the resolutions at shareholders’ meetings are closely connected to shareholders’ rights, relevant regulations are explicitly stipulated, including meeting process-related matters such as check-ins, live streaming, raising questions, voting, ballot counting, proposing extempore motions and proposing to amend the content of the original meeting proposals; shareholders’ right of registration for online attendance after having exercised their voting right via written or electronic means; and the ways companies reveal the results of motions and elections.
X. To ensure companies make contingency plans for disconnection issues in shareholders’ meetings when they are unable to continue due to natural disasters, incidents, or other force majeure events that prevent the operating of their virtual platforms or that prevent shareholders from attending meetings virtually, regulations are explicitly stipulated, including the deadlines of shareholders’ meetings if they need to postpone or reconvene their meetings, requirements for shareholders entitled to join, the definitions of the total shares of attendees and voting rights related to motions and elections, the principles that they will follow to determine whether to postpone or reconvene their meetings, as well as related meeting process.
XI. To inform shareholders of the shareholders’ meeting situation, the minutes content of virtual shareholders’ meetings is stipulated. Regulations are also formulated to serve as a way of clarification when disputes regarding shareholders’ meetings occur. Companies and their shareholder services agencies should follow the rules of the record retention of sign-ups, registration, check-ins, raising questions, voting, ballot counting, and the audio or video recordings of their meetings.
XII. When companies convene virtual shareholders’ meetings, they should help shareholders familiarize themselves with the virtual meeting platforms so that shareholders can properly exercise their rights. Therefore, companies should specify the chosen virtual meeting platforms in their agenda handbooks.
XIII. To make it convenient for shareholders who attend virtually to read shareholders’ meetings’ agenda handbooks and meeting materials at shareholders’ meetings, companies should upload their agenda handbooks and meeting information to their virtual meeting platforms.
The FSC will continue to promote diverse ways of shareholder meeting participation and go digital so as to keep up with the international trend, further protect shareholders’ rights, and fulfill shareholder activism.
Appendix: The summarized important aspects of the Operation Guidelines for Public Companies’ Virtual 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
The summarized important aspects of amendments to the Regulations Governing the Administration of Shareholder Services of Public Companies and Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies are as follows:
I. To better meet pandemic prevention measures and practical needs, public companies are now allowed to convene hybrid meetings (i.e. physical shareholders’ meetings with assistance of video conferencing) and virtual-only meetings (i.e. 100% virtual shareholders’ meetings with no physical meetings).
II. To ensure shareholders’ rights, it is explicitly stipulated that if companies plan to convene virtual meetings, including virtual-only and hybrid shareholders’ meetings, they must have it written in their articles of incorporation and approved by their board of directors. In the event of natural disasters, incidents, or other force majeure, the Ministry of Economic Affairs (MOEA) may announce that companies may not need to have the said types of meetings written in their articles of incorporation within a specified period. In addition, since hybrid meetings can help protect shareholders’ rights, hybrid meetings approved by special resolutions at the board of directors meetings will be exempted from the said articles of incorporation restrictions within one year after adopting the revised regulations. Those cases with special resolutions will be exempted from the said articles of incorporation restrictions.
III. Companies that plan to convene virtual-only shareholders’ meetings should meet the following requirements:
(i) Shareholders’ meetings do not have motions to elect directors and/or supervisors.
(ii) Shareholders’ meetings do not have motions to dismiss directors and/or supervisors.
(iii) Shareholders’ meetings do not have motions stipulated in Article 185 and 316 of the Company Act, Article 18, 27, 29 and 35 of the Business Mergers And Acquisitions Act, or Article 24 Paragraph 2 Item 1 and Article 26 Paragraph 2 Item 1 of the Financial Holding Company Act (i.e. major mergers and acquisitions).
(iv) Companies whose stocks are not listed on the stock exchange or traded on the over-the-counter (OTC) market should outsource shareholder services agencies to handle their shareholder services.
IV. Companies that plan to convene hybrid shareholders’ meetings should meet the following requirements:
(i) Shareholders’ meetings do not have motions to elect directors and/or supervisors, or if they do, the number of the candidates should not exceed the quota of the directors and supervisors to be elected.
(ii) Shareholders’ meetings do not have motions to dismiss directors and/or supervisors.
(iii) Companies whose stocks are not listed on the stock exchange or traded on the OTC market should outsource shareholder services agencies to handle their shareholder services.
V. To ensure the secure and neutral nature of the virtual communications deployed for shareholders’ meetings, providers of virtual meeting platforms should meet related requirements and should report to and be examined by the Financial Supervisory Commission (FSC) before they commence their work.
VI. To ensure shareholders understand the relevant rights and limitations of participating in shareholders’ meetings, it is explicitly stipulated that the meeting notice should include shareholders’ participation methods and ways of exercising their rights, countermeasures against virtual meeting and platform failures caused by natural disasters, incidents, or other force majeure events, as well as proper alternative measures for shareholders who have difficulty attending shareholders’ meetings virtually.
VII. To reflect the diversity of shareholders’ attendance at or participation in shareholders’ meetings, relevant procedures should be formulated, including circumstances where shareholders, solicitors, and proxy agents register for online attendance, where shareholders have registered for attending shareholders’ meetings virtually but wish to attend physically, and where shareholders have exercised their voting right via written or electronic means but wish to attend shareholders’ meetings virtually.
VIII. To safeguard shareholders’ rights, it is explicitly stipulated that shareholders who have exercised their voting right via written or electronic means and haven’t withdrawn their declaration of intent may still attend shareholders’ meetings virtually. However, they can only exercise their proposing and voting rights regarding extempore motions. In addition, they cannot vote on the original meeting proposals and the amendments to the content of the original meeting proposals, or propose to amend the content of the original meeting proposals.
IX. Considering that the participation procedures of virtual meetings and the results of the resolutions at shareholders’ meetings are closely connected to shareholders’ rights, relevant regulations are explicitly stipulated, including meeting process-related matters such as check-ins, live streaming, raising questions, voting, ballot counting, proposing extempore motions and proposing to amend the content of the original meeting proposals; shareholders’ right of registration for online attendance after having exercised their voting right via written or electronic means; and the ways companies reveal the results of motions and elections.
X. To ensure companies make contingency plans for disconnection issues in shareholders’ meetings when they are unable to continue due to natural disasters, incidents, or other force majeure events that prevent the operating of their virtual platforms or that prevent shareholders from attending meetings virtually, regulations are explicitly stipulated, including the deadlines of shareholders’ meetings if they need to postpone or reconvene their meetings, requirements for shareholders entitled to join, the definitions of the total shares of attendees and voting rights related to motions and elections, the principles that they will follow to determine whether to postpone or reconvene their meetings, as well as related meeting process.
XI. To inform shareholders of the shareholders’ meeting situation, the minutes content of virtual shareholders’ meetings is stipulated. Regulations are also formulated to serve as a way of clarification when disputes regarding shareholders’ meetings occur. Companies and their shareholder services agencies should follow the rules of the record retention of sign-ups, registration, check-ins, raising questions, voting, ballot counting, and the audio or video recordings of their meetings.
XII. When companies convene virtual shareholders’ meetings, they should help shareholders familiarize themselves with the virtual meeting platforms so that shareholders can properly exercise their rights. Therefore, companies should specify the chosen virtual meeting platforms in their agenda handbooks.
XIII. To make it convenient for shareholders who attend virtually to read shareholders’ meetings’ agenda handbooks and meeting materials at shareholders’ meetings, companies should upload their agenda handbooks and meeting information to their virtual meeting platforms.
The FSC will continue to promote diverse ways of shareholder meeting participation and go digital so as to keep up with the international trend, further protect shareholders’ rights, and fulfill shareholder activism.
Appendix: The summarized important aspects of the Operation Guidelines for Public Companies’ Virtual 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
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Update：
2022-03-15