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Food and Drugs Administration
1. New Rules on Food Product Labeling
In a press release of June 19, 2014, the Food and Drug Administration confirmed the effective dates of the following new rules on food product labeling:
(1) “Regulations Governing the Labeling of Packaged Beverages Claimed to Contain Fruit and Vegetable Juice”, “Regulations Governing the Labeling of Milk, Preserved Milk, Flavored Milk or Milk Powder Products”, and “Regulations Governing the Labeling of Prepackaged Rice Thread” took effect as of July 1, 2014.
(2) Rules that individual raw materials of a compound food additive must be labeled using their generic names, and rules that a food additive which is an antioxidant, a preservative, or a sweetener must be labeled in both their generic and functional names, took effect as of June 19, 2014.
Reported by: Jolene Wang / Crick Liang
2. Three Sets of Draft Regulations on the Labeling of Genetically Modified Foods
On June 20, 2014, the Ministry of Health and Welfare (MOHW) announced three sets of draft regulations on the labeling of genetically modified foods, or food additives containing genetically modified food raw materials. According to the draft sets of regulations, packaged food, a food additive or bulk food containing a raw material comprising more than 3% of genetically modified ingredients (a raw material unintentionally incorporating less than 3% genetically modified ingredients is deemed non-genetically modified) must be labeled with “Genetically Modified” or the like.
Reported by: Jolene Wang / Crick Liang
Labor
3. Application for entry into Taiwan of people from Mainland China
The Ministry of the Interior issued a press release stating that online application was adopted from January 1, 2014 for people from Mainland China to apply for visas to enter Taiwan for professional or commercial purposes. It takes the competent authority around 3 to 5 days to issue such visas.
Reported by: David Tsai / Robin Huang
Banking
4. Effective date of amended Financial Consumer Protection Act
Reported by: Stacy Lo / Mark Chen
5. Self-regulation for banks conducting financial derivatives business
To address concerns about banks conducting Target Redemption Forward (TRF) business, the Bankers Association of the R.O.C ("Bankers Association") has amended "Self-regulation for Banks Conducting Financial Derivatives Business" and "Self-regulation of Risk Management for Banks Conducting Financial Derivatives Business" according to the Financial Supervisory Commission's (FSC's) request, which was submitted to the FSC for record on June 17, 2014. The amendments aim to implement 'Know Your Customer' procedures, product suitability evaluation, quota approval principles, provision of Chinese translation of contracts and documents, information on product risks, provide a remuneration evaluation system and a procedure for review of new products. The Bankers Association has allowed member banks three to six months to make the necessary adjustments and until all deficiencies are dealt with and all the systems are implemented, no banks are permitted to engage in new non-hedging TRF products.
Reported by: Stacy Lo / Angela Lin
Branch Offices or Representative Offices of Chinese Companies
6. Draft Amendments to Regulations Governing Branch Offices or Representative Offices in Taiwan of Chinese Companies
The Ministry of Economic Affairs announced draft amendments to the Regulations Governing Branch Offices or Representative Offices in Taiwan of Chinese Companies on June 16, 2014. The key points are set forth below.
(1) Any profit-seeking enterprises organized under the laws of Mainland China (Mainland Enterprises) that would like to set up a representative office in Taiwan shall comply with the requirements for operation years, minimum paid-in capital and business scope.
(2) The competent authority may reject Mainland Enterprises' applications to set up a branch office or representative office in Taiwan if the business activities to be undertaken locally are politically sensitive or adversely impact national security.
(3) The competent authority and the authority supervising the business activities to be undertaken by Mainland Enterprises shall jointly review applications for representative offices.
(4) A representative office, once approved, shall submit work plans and budgets relating to business activities in Taiwan to regulators. Failure to do so will lead to revocation or abolition of the approval.
(5) Mainland Enterprises shall retain a CPA or attorney to file applications for branch or representative offices.
Reported by: Kang-Shen Liu
7. Promulgation of amended "Regulations Governing the Offering and Issuance of Securities by Securities Issuers"
The Financial Supervisory Commission (FSC) promulgated the amended "Regulations Governing the Offering and Issuance of Securities by Securities Issuers" ("Regulation") on June 26, 2014. In addition to the current "professional institutional investors", the Regulation further allows qualified judicial persons and individuals (collectively, 'Sophisticated Investors') to invest in straight corporate bonds of a professional board. For more information on the amendments, please refer to point 7, in Issue No. 199 of the Lexgroup Newsletter. ( http://www.lexgroup.com.tw/in_news.php?n_type=3&sn=136)
Reported by: Kang-Shen Liu / Angela Lin
8. Rulings related to the offering and issuance of straight corporate bonds
In line with the amended Regulation mentioned above, the FSC issued three rulings in relation to the offering and issuance of straight corporate bonds on June 26, 2014. We summarize them below:
(1) For foreign currency/ Renminbi denominated straight corporate bonds issued by foreign issuers/ institutions registered in Mainland China, which are only offered to Sophisticated Investors in Taiwan, the definition of Sophisticated Investors is subject to the "GreTai Securities Market Rules Governing Management of Foreign Currency Denominated International Bonds" (Rules).
(2) When domestic issuers/foreign issuers report issuance of foreign currency denominated bonds/straight corporate bonds, a prospectus in Chinese is compulsory unless the investors are limited to Sophisticated Investors, the definition of which is also subject to the Rules.
Reported by: Kang-Shen Liu / Angela Lin
SITE Fund
9. Securities brokerage firms permitted to purchase securities investment trust funds in own name under certain conditions
On June 12, 2014, the Financial Supervisory Commission ("FSC") issued a ruling (Ref. No.: Jin-Guan-Zheng-Tou-Zi-1030021777) to permit securities brokerage firms to act as sales agents of SITE funds. Securities brokerage firms may subscribe a SITE fund on behalf of investors under the name of the brokerage firms either by:
(1) Wealth management accounts to be utilized to conduct assets allocations for clients; or
(2) Specific fund payment/receipt accounts to be set up in accordance with Article 38 of the Regulations Governing Securities Firms.
Reported by: Jeffrey Liu / Judy Tai
SICE
10. Draft amendments to Regulations Governing Securities Investment Consulting Enterprises
On June 18, 2014, the FSC announced draft amendments to Articles 5-1 and 28 of "Regulations Governing Securities Investment Consulting Enterprises", to require a securities investment consulting enterprise ("SICE") which conducts securities investment analysis through any kind of mass media to appoint an internal auditor. Where a SICE fails to do so, the FSC may restrict the SICE from conducting securities investment analyzes activities through such media. The draft also provides a 6-month grace period for applicable SICEs to comply with the requirement.
Reported by: Jeffrey Liu / Judy Tai
Securities Firms
11. Amendments to regulations related to securities firms
On June 18 and 27, 2014, the FSC issued a ruling and amended certain articles of "Regulations Governing Securities Firms" and "Regulations Governing Responsible Persons and Associated Persons of Securities Firms" respectively. These are summarized as follows.
(1) The ruling related to Article 15 of "Regulations Governing Securities Firms" (Ref. No.: Jin-Guan-Zheng-Quan-Zi-1030020595) will further permit a securities firm to endorse or act as a guarantor for its offshore subsidiaries for financing purposes.
(2) Amendments to "Regulations Governing Securities Firms" and "Regulations Governing Responsible Persons and Associated Persons of Securities Firms" apply to securities day trading, further permitting investors to sell spot securities and buy them back on the same day.
Reported by: Jeffrey Liu / Judy Tai
Insurance
12. FSC to Amend "Regulations for Establishment and Administration of Insurance Enterprises"
The Financial Supervisory Commission proposes to amend the Regulations for the Establishment and Administration of Insurance Enterprises regarding conditions and compliance with respect to capital calculation, owner's equity and various reserve funds.
Reported by: David Tsai / Angela Chang
13. FSC to Amended "Regulations Governing Insurance Agents"," Regulations Governing Insurance Brokers "and" Regulations Governing Insurance Surveyors”
The Financial Supervisory Commission proposes to amend "Regulations Governing Insurance Agents"," Regulations Governing Insurance Brokers "and" Regulations Governing Insurance Surveyors" in the near future. The key points are summarized below:
(1) Amending of the qualifications of responsible persons;
(2) Establishing a full-time general manager;
(3) Increasing the threshold of capital, and giving five years for adjustment;
(4) Increasing the time for educational training;
(5) Amending qualifications for establishing branches; and
(6) Prohibiting the receiving of remuneration beyond the agreements for other reasons or the names of third parties.
Reported by: David Tsai / Angela Chang
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2014-07-08
