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Labor
1. Draft Amendments to the Regulations for the Allocation and Management of the Workers' Retirement Reserve Funds
The Ministry of Labor announced draft amendments to the “Regulations for the Allocation and Management of the Workers' Retirement Reserve Funds” (“Draft Amendments”) on July 15, 2015, which aims to coordinate with the amendment of Article 56 of the Labor Standard Act, to remove partial articles. In addition, the Draft Amendments provide that when a business suspends its operations, the labor pension reserves held in a special account for an old pension scheme, in addition to paying for pensions, may be used for severance of labor under the old pension scheme. It may also be used for severance of labor under a new pension scheme.
Reported by: David Tsai / Robin Huang
2. Amendments to the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund
The Ministry of Labor announced an amendments to the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (“Regulations”) on July 22, 2015, which aims to amend the utilization scope of Labor Retirement Fund (“Fund”):
(1) To provide that the Fund may invest in offshore and onshore real estate.
(2) To remove the restrictions that investment in equity securities, beneficiary certificates issued by domestic securities investment trust funds, futures trust funds, mutual trust funds or collective trust products shall not be greater than 40% of the net value of the Fund.
(3) To loosen the restrictions on the utilization scope involving foreign exchange deposits and overseas investments to 50% of the net value of the Fund.
(4) To provide that the domestic derivative transactions engaged in by the Fund are regulated by these Regulations as well.
Reported by: David Tsai / Robin Huang
Litigation
3. Draft Amendments to Guidelines for Record and Use of Court Hearing
The Judicial Yuan announced drafted amendments to the “Guidelines for Record and Use of Court Hearing” ("Guidelines"). The main amendments are below:
(1) The name of Guidelines will be renamed "Guidelines for Tape-record and Video-record and Use of Court hearing"; and
(2) The litigants may apply with a valid reason for delivery of the records. The court has the power to approve or decline the request.
Reported by: David Tsai / Angela Chang
Government Procurement Act
4. Ruling for Government Procurement Act
The Executive Yuan announced with immediate effect a ruling with respect to the Government Procurement Act on July 17, 2015. The ruling explains that the following situations show that "there is a violation of laws and regulations which affects the fairness of the procurement found by the competent authority":
(1) Illegal or improper activities that may impair the fairness of the procurement are found under Items 3, 4, 5, and 7 of Paragraph 1 of Article 48;
(2) Situations under Item 2 of Paragraph 1 of Article 50;
(3) Permission for lending others the name or license for attending bidding procedure;
(4) Situations which constitute Article 87; and
(5) Asking for expected promises or delivering bribes or other undue benefits to civil servants with respect to invitations to tender, tender evaluations, and award of contracts.
Reported by: David Tsai / Angela Chang
Company Act
5. Tentative Resolution
The Ministry of Economic Affairs announced a ruling on July, 29 2015, that tentative resolution may only be adopted when the number of voting shares present at a shareholders meeting does not constitute quorum and votes cast at such meeting do not meet the legal requirement. To avoid difficulties, it is improper to raise the statutory quorum and voting requirement in the articles of incorporation.
Reported by: Kang-Shen Liu
Mergers and Acquisitions
6. The Amendments to the Enterprise Mergers and Acquisitions Act will take effect on January 8, 2016
The Enterprise Mergers and Acquisitions Act was announced by the President on July 8, 2015, and the relevant amendments will take effect on January 8, 2016. For more details, please refer to our Alert Sheet issued on July 2, 2015.
Reported by: Kang-Shen Liu / Angela Lin
Accounting
7. Regulations on Business Entity Accounting Handling
The Department of Commerce, Ministry of Economic Affairs defined "generally accepted accounting principles" in Article 2 of the Regulations on Business Entity Accounting Handling as "all accounting standards of enterprises published by the Accounting Research and Development Foundation and interpretations" thereof, which will apply from January 1, 2016, although voluntary adoption from the commencement date of fiscal year 2015 is welcomed.
Reported by: Kang-Shen Liu
Intellectual Property
8. The Judicial Yuan has implemented the first online prosecution system for administrative litigation cases at the Intellectual Property Court
As the most important part of Judicial Yuan’s E-Court Project, an online prosecution system is available first for administrative litigation cases at the Intellectual Property Court, which was started on July 20, 2015. The online prosecution system is accessible through the website https://efiling.judicial.gov.tw. After logging into the system using the required username, password and Electronic Signature, an attorney may proceed with an online prosecution or an online submission of pleadings for administrative litigation cases over which the Intellectual Property Court has jurisdiction. However, the following are not allowed to be submitted through the online prosecution system: requests for preservation of evidence, confidentiality orders, provisional seizures, provisional dispositions, provisional remedies and suspended implementations, or documents requiring the litigant’s signature as prescribed by law (e.g. a Power of Attorney).
Reported by: Jolene Wang / Crick Liang
Securities Firm
9. Draft Amendments to "Regulations Governing Borrowing or Lending Money in Connection with Securities Business by Securities Firms" and "Regulations Governing Securities Lending by Securities Firms"
On July 15, 2015, the Financial Supervisory Commission ("FSC") issued a ruling (Ref. No. Jin-Guan-Zheng-Quan-Zi-1040027602) to announce draft amendments to the regulations as mentioned in the title. The major amendments intend to cope with the relaxation of limits regarding margin purchases and short sales for investors, for which securities firms may control and manage the financing amounts for customers on their own. Securities firms must adopt corresponding internal credit management rules and risk control procedures. The draft amendments also provide certain other relaxations measures for such business.
Reported by: Jeffrey Liu / Caitlyn Kao
10. Draft Amendments to "Regulations Governing Responsible Persons and Associated Persons of Securities Firms"
On July 27, 2015, the FSC issued a ruling (Ref. No. Jin-Guan-Zheng-Quan-Zi-1040029636) to announce the draft amendments to the Regulations Governing Responsible Persons and Associated Persons of Securities Firms. We summarize below:
(1) Legal compliance personnel of a securities firm may concurrently hold a position of the same nature at foreign securities affiliates of the firm;
(2) A responsible person of a securities firm may serve as the chairman of other financial institutions where there is a necessity and after obtaining the approval of the FSC;
(3) Personnel educational requirements are raised; and
(4) The responsible person or an associated person of a securities firm is restricted from opening an account, subscribing to securities, purchasing securities or handling settlement matters on behalf of any other person, unless he/she is the statutory agent of such person.
Reported by: Jeffrey Liu / Caitlyn Kao
Finance
11. Amendments to Criteria Governing Internal Control Systems
On July 21, 2015, the Taiwan Stock Exchange Corporation (TSEC) announced amendments to the "Criteria Governing Internal Control Systems of Securities Firms" and "Criteria Governing Internal Control Systems of Future Commission Merchants" (Ref. No.: Tai-Zheng-Fu-Zi-1040014580), which are amended to be in line with relevant updated regulations and rulings and to incorporate the regulations of the Taipei Exchange. In addition, the Trust Association announced amendments to the "Criteria Governing Internal Control Systems of Trust Enterprises" on the same day (Ref.: No.: Zhong-Tuo-Cha-Zi-1040000633) to bring it in line with the amendments of "Financial Consumer Protection Act" and "Regulations Governing Collective Management and Utilization of Trust Funds".
Reported by: Jeffrey Liu / Judy Tai
Fund
12. Amendment to "The Securities Investment Trust and Consulting Association Guidelines for Advertisements and Business Activities Performed by Members and Their Sales Agents" ("Guidelines")
On July 31, 2015, the Securities Investment Trust and Consulting Association issued a ruling (Ref. No.: Zhong- Xin- Gu-Zi-1040051500) announcing the amendment to Item 6, Paragraph 1, Article 12 of the Guidelines. The purpose of the amendment is to stipulate and unify the calculation formulas of the annual distribution rates for funds with distributing share classes.
Reported by: Jeffrey Liu / Judy Tai
Tax
13. The Scope of Taxation or Exemption within the Territory of Taiwan, R.O.C. for Offshore Insurance Units
On July 21, 2015, the FSC announced a ruling to stipulate the scope of taxation and exemptions for offshore insurance units ("OIUs"), stating that the scope of income, sales revenue and all types of certificates derived from utilization of funds by OIUs within the territory of Taiwan, R.O.C. subject to taxation or exemptions as specified in the Income Tax Act, Value-Added and Non-Value-Added Business Tax Act and Stamp Tax Act are as follows:
(1) Where trading location for utilization of funds is within the territory of Taiwan, R.O.C.;
(2) Where the trading counterpart for utilization of funds is an individual, legal person, organization or financial institution within the territory of Taiwan, R.O.C.;
(3) Where the invested securities were issued within the territory of Taiwan, R.O.C.; and
(4) Other items of the utilized fund are recognized by the competent authorities.
Reported by: Stacy Lo / Mark Chen
14. The Calculation of Undistributed Earnings for Adoption of International Financial Reporting Standards
On July 31, 2015, the Ministry of Finance announced a press release in respect of calculation of the undistributed earnings under the application of International Financial Reporting Standards (IFRSs). If a profit-seeking enterprise applies the IFRSs to prepare its financial report in accordance with the relevant laws and regulations from 2013 fiscal year onward and the profit-seeking enterprise adjusts its accumulated earnings previously applied to the Business Entity Accounting Act, which results in a debit balance (accumulated loss) from the accumulated retained earnings of 2012 after the application of IFRSs in 2013, the amount of after-tax earnings used for making up such debit balance shall be deemed a deduction item for the calculation of annual undistributed earnings.
Reported by: Stacy Lo / Mark Chen
Banks
15. Draft Amendment to the Regulations Governing the Business Scope and Risk Management for Banks Engaging in Trust or Securities Business
The FSC announced a draft amendment to Article 5 of the "Regulations Governing the Business Scope and Risk Management for Banks Engaging in Trust or Securities Business" on July 20, 2015, which provides that banks are permitted to use the same business premises and personnel (including supervisors) to conduct foreign bonds trading agency business and to provide information and advisory services on offshore financial derivatives.
Reported by: Stacy Lo / Angela Lin
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2015-08-06
