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Important Measures

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Important Measure February 2022

1.    FSC Amends “Regulations Governing Futures Trust Enterprises”
In order to strengthen the risk management mechanisms and the management of personnel transactions of futures trust enterprises (FTEs), the Financial Supervisory Commission (FSC) issued amendments to the Regulations Governing Futures Trust Enterprises on 18 February 2022. Key amendments are as follows:
I.    Considering that risk management personnel have become an important part of the corporate governance of FTEs, the job description of risk management is added to associated persons of FTEs. The amendment also requires that FTEs shall have adequate and competent risk management personnel, and specifies the qualifications these personnel shall possess and that they shall be full-time personnel. FTEs shall comply with these regulations by 31 December 2022.
II.    FTEs are professional institutional investors who raise futures trust funds from the public to execute investments and trades, and are highly related to the rights of investors. In order to avoid conflicts of interest as well as to implement professional operating principles, the amendment stipulates that FTEs’ personnel may not act as another person's agent engaging in the trading of futures or futures-related spot commodity trading.

2.    FSC amends "Regulations Governing the Preparation of Financial Reports by Securities Firms" and "Regulations Governing the Preparation of Financial Reports by Futures Commission Merchant.
To improve the quality and compliance of non-financial disclosures, the FSC on 22 February 2022 amended the aforementioned Regulations, then on 24 February 2022, to coordinate with those amendments, the FSC issued an interpretive order to amend the attached forms. Key points of the amendments include the following:
I.     The amended Regulations expressly provide that at any securities firm or futures commission merchant (FCM) which is a foreign company's branch within the territory of the Republic of China (ROC), the matters that under these Regulations are required to be handled by the board of directors or supervisors shall be handled by the responsible persons of the ROC branch who are authorized by the head office or regional headquarters of the foreign company. 
II.    Improve the quality of non-financial information disclosure:
i.    Strengthen the information disclosure on cyber security management: The amendment stipulates that securities firms and FCMs shall clearly describe information such as cyber security policy, specific management plan and resources invested in cyber security management. In addition, securities firms and FCMs shall disclose the impact of cyber security risks on their finance and business and countermeasures, as well as their losses suffered, possible impact and countermeasures due to severe cyber security accidents.
ii.    Strengthen the information disclosure on the professional fees of certified public accountants (CPAs): The amendment requires securities firms and FCMs to disclose the specific amounts paid in CPA professional fees, deletes the option for securities firms and FCMs to use a tiered disclosure method for disclosing the fees, and additionally requires disclosure of the content of non-audit services.
Visitor: 686   Update: 2022-04-18