1. The FSC Revises Regulation to Allow Qualified Offshore Funds Approved by FSC to Invest in Mainland China up to 30%
To encourage offshore fund institutions to broaden their commitment in Taiwan, the FSC on June 3rd, 2017 issued an order revising the regulation on investment in Mainland securities by offshore funds offered and sold in Taiwan. The order expands the scope of allowed investments in Mainland China into the China Interbank Bond Market, and eases the cap on total investment in securities listed or issued in Mainland China per offshore fund up to 30 percent. These preferential measures are granted to offshore fund institutions that have been recognized under the Plan to Encourage Stronger Business Ties in Taiwan for Offshore Funds.
2. The FSC Revises Regulation Regarding 30% Limit on Foreign Stock Trading Orders Placed With a Single Securities Firm by a Securities Investment Trust Enterprise (SITE) Using Fund Assets
To increase the flexibility for SITEs to invest in foreign stocks, the FSC on June 13th, 2017 amended the order pursuant to Paragraph 1 Article 10 of the Regulations Governing Securities Investment Trust Funds. The order exempts SITEs using fund assets to invest in foreign stocks from the restriction that prohibits placing stock trading orders with any single securities firm in an amount exceeding 30 percent of the total monetary value of the fund’s stock trades in any given fiscal year.
3. FSC Issues Orders Announcing the Adoption of the Regulations Governing Anti-Money Laundering for Certified Public Accountants and the Directions Governing Anti-Money Laundering for Certified Public Accountants
The FSC on June 26th, 2017 issued Order No. Financial-Supervisory- Securities-Auditing-1060023292 and 10600232921, announcing the adoption of the Regulations Governing Anti-Money Laundering for Certified Public Accountants and Directions Governing Anti-Money Laundering for Certified Public Accountants, which came into force from June 28th, 2017. When a certified public accountant (CPA) handles business specified in Article 5, paragraph 3, subparagraph 3 or 5 of the Money Laundering Control Act, the CPA shall conduct customer due diligence procedures and shall keep records of the transactions and report suspicious transactions as provided in Article 6, paragraph 2, Article 7, paragraph 4, Article 8, paragraph 3, and Article 10, paragraph 3 of the Money Laundering Control Act. Additionally, CPAs are required to take part in relevant in-service training, and any CPA firm that a CPA establishes or joins is required to implement internal control procedures.
4. On June 28th, 2017, the FSC published amendments of the Regulations Governing the Preparation of Financial Reports by Securities Issuers in coordination with the IFRSs adopted in 2018
To accommodate Taiwan’s coming synchronous adoption of International Financial Reporting Standard (IFRS) 9 “Financial Instruments” and IFRS 15 “Revenue from Contracts with Customers” in 2018, the FSC issued accordingly a partial amendment to the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Key points include amendments to relevant accounting items on the balance sheet and income statement, adjustments to supplementary schedules and statements of major accounting items, and the provisions that require information related to financial instruments and contracts with customers to be disclosed in the notes to the financial report. The amended articles will take effect from fiscal year 2018.