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Important Measures

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Important Measure March 2022

1.    Partial Amendments to the Regulations Governing the Administration of Shareholder Services of Public Companies and Articles 3 and 6 of the Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies
To bring practice in 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 the Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies were amended after reviewing international practices, local experience in physical shareholders’ meetings with assistance of video conferencing amid pandemic, and shareholders’ meeting practical operation. Expected to be conducive to better shareholder activism, the Financial Supervisory Commission (FSC) issued amendments to the aforementioned regulations on 4 March 2022. Key amendments 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.    To convene virtual-only shareholders’ meetings, the following requirements should be met:
i.    No motions to elect directors and/or supervisors.
ii.    No motions to dismiss directors and/or supervisors.
iii.    No 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.    To convene hybrid shareholders’ meetings, the following requirements should be met:
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 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.
2.    The FSC Announced the Transition Strategies of Sustainable Development for Securities and Futures Sectors (Date of Promulgation: 8 March 2022)
The FSC has announced the Transition Strategies of Sustainable Development for Securities and Futures Sectors on 8 March 2022 to sustain long-term growth. The strategy puts forth five major goals namely: perfecting the sustainable ecological system; upholding of the capital market's trading order and stability; strengthening of the self-discipline mechanism and resources integration of securities and futures sector; transitioning of securities and futures management and sectors; protecting the rights of investors or traders; and instituting fair and friendly services, to be attained via three implementation structures, 10 strategies, and 27 concrete measures. The FSC aims to materialize the goals of the sustainability transition strategy in three years via collaborations with the Taiwan Stock Exchange (TWSE), Taipei Exchange (TPEx), Taiwan Futures Exchange, and Taiwan Depository & Cleaning Corporation, as well as the three securities and futures industry associations. The three implementation structures are as follows:
I.    Structure for sustainability governance: attainment via the four strategies of establishment of sustainability values and ESG (environmental, social, and governance) culture, information security system, accountability system for the board of directors and management, and assistance of functional committees for the board of directors in the fulfillment of the latter's duties, along with eleven concrete measures. 
II.    Structure for exerting intermediary to facilitate corporate sustainability: attainment via the three strategies including: empowerment of underwriters and financial consultants to assist companies listed on the TWSE, TPEx, and Emerging Stock Market in materializing various sustainability and ESG programs; establishment of the mechanisms of self-discipline, incentives, and supervision by dealers, investors, mutual-fund managers, and discretionary-account managers for their ESG and responsible investing; and materialization of the practices of fair customer treatment and protection of such investors as senior citizens and the physically and mentally challenged, along with nine concrete measures.
III.    Structure for sustainability information disclosure: attainment via the three strategies of strengthening the capabilities for coping with climate-change risk, increasing disclosure of sustainability information, and perfecting channels for information disclosure and external communications, along with seven concrete measures.
3.    Order Announced to Paragraph 2 of Article 4 of Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals (Date of Promulgation: 28 March 2022)
For overseas Chinese and foreign nationals engaging in the Taiwan Futures Exchange’s central clearing of New Taiwan Dollar (NTD)-denominated domestic OTC derivatives, the settlement  including variation margin and mark-to-market difference should be paid or received in NTD, and the amount must not exceed 30 percent of the net inward remittance.
 
Visitor: 2210   Update: 2022-05-31
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