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Close-end Company
1. The capital contribution ceiling for promoters of a close-end company in the form of services or credits
In a preannouncement on August 20, the Ministry of Economic Affairs set a ceiling for promoters of a close-end company contribute capital in the form of services or credits. For a company with paid-in capital less than NT$30,000,000 (around US$1,000,000), the total equity contributed by promoters in the form of services or credits shall not be more than 50% of the total issued and outstanding shares; for a company with paid-in capital no less than NT$30,000,000 (around US$1,000,000), the total equity contributed by promoters in the form of services or credits shall not be more than 25% of the total issued and outstanding shares.
Reported by:Kang-Shen Liu / Angela Lin
2. Amendment to the Reference Table for Fines and Multiples of Punishments.
On August 24, 2015, the Ministry of Finance amended the "Reference Table for Fines Amounts and Multiples". If a person uses the name(s) of others to sell a house or land and violates the Specifically Selected Goods and Services Tax Act, this amendment provides that the multiples of fines will depend on the types of the violations.
Reported by:Stacy Lo / Mark Chen
3. Amendments to Rules Governing Organization of Supervisory Committee of Business Entities’ Labor Retirement Reserve
The Ministry of Labor announced the amendments to the “Rules Governing Organization of Supervisory Committee of Business Entities’ Labor Retirement Reserve” on August 26, 2015, to add Paragraph 1 of Article 10 stating that when a laborer of an enterprise unit asks to check the balance within a labor pension reserve special account, the supervisory committee shall have the obligation to provide it.
Reported by:David Tsai / Robin Huang
4. Draft amendment to the "Regulations Governing Internal Control System and Procedure for Banks Conducting Financial Derivatives Business"
The Financial Supervisory Commission (FSC) announced the draft amendment to the "Regulations Governing Internal Control System and Procedure for Banks Conducting Financial Derivatives Business", adding "high net worth institutional investor" into the definition of professional investors. A high net worth institutional investor shall reach the following requirements:
(1) The most recent financial report audited or reviewed by a CPA shows that its net asset value exceeds NT$20 billion (around US$666,666,666);
(2) A fully-responsible investment team with suitable professionals is accounted for;
(3) The most recent financial report audited or reviewed by a CPA shows that its positions on the securities or financial investment portfolios reach NT$1 billion (around US$33,333,333); and
(4) The firm has established an internal control system that complies with all applicable laws and regulations.
The transactions with high net worth institutional investors shall follow the practice of transactions with professional institutional investors, which means no Chinese translation of relevant transaction agreements is required. The advertisement materials and disclosure of important transaction terms and conditions and risks to high net worth institutional investors shall also follow the practice of transactions with professional institutional investors, which will not apply to the requirements governing the sale of complex and high-risk products and no audio or video recording is required.
Reported by:Stacy Lo / Angela Lin
5. Draft of the Regulations Governing Banks and Financial Holding Companies applying to Invest in Information Technology Service Enterprise or Financial Technology Enterprise.
On August 25, 2015, the FSC announced a draft of the "Regulations Governing Banks and Financial Holding Companies Applying to Invest in Information Technology Service Industry or Financial Technology Industry " ("Draft"). This Draft aims to provide that the information technology service enterprises or financial technology enterprises will be recognized as a finance-related enterprise which may be invested in by a bank and financial holding company. We set forth the key points below:
(1) To provide the definition of "Information Technology Service Enterprise" and "Financial Technology Enterprise".
(2) To provide the ratio limitation of annual operating costs or business income, and its exemption.
(3) To provide the regulation related to the information protection of individuals or clients.
(4) If the information technology service enterprise or financial technology enterprise is an interested party of a bank or financial holding company in substance, the bank or financial holding company shall include them into their scope of interested parties.
Reported by:Stacy Lo / Mark Chen
6. Draft Amendment to the "Directions Governing Limitations on Types and Amounts of the Securities in which a Commercial Bank May InvestIn"
The FSC announced the draft amendment to the "Directions Governing Limitations on Types and Amounts of the Securities in which a Commercial Bank May Invest In" on August 24, 2015, relaxing the limitation on the aggregate outstanding amount of the original acquisition cost of the securities traded on the Taiwan Stock Exchange or OTC market and invested in by a commercial bank to no more than 30% of the calculation basis of the commercial bank, which may be further adjusted by the FSC according to the economic conditions.
Reported by:Stacy Lo / Angela Lin
7. The FSC Amended the "Guidelines for Custodian of Separate Account and Investment Objective for Investment-Linked Insurance"
The FSC issued the amendments to items 3 and 7 of Guidelines for Custodian of Separate Account and Investment Objective for Investment-Linked Insurance "(the "Amendments"), which take effective immediately. The key points of the Amendments are below:
(1) To delete wording related to "and the issuing credit level of the bonds" on item 3.1.2.2; and
(2) The foreign bonds provided in item 3, which is linked with investment-linked insurance, shall be traded in Taiwan OTC and shall not be sold to professional investors only.
Reported by:David Tsai/ Angela Chang
8. The FSC Amended the "Guidelines of Reviewing Operations for the External Reviewing Actuaries of Insurance Companies"
On August 24, 2015, the FSC stipulated Guidelines of Reviewing Operations for the External Reviewing Actuaries of Insurance Companies ("Guidelines") according to Paragraph 4 of Article 7 of Regulations Governing Appointed Actuaries and External Reviewing Actuaries of Insurance Companies. The stipulation of the Guidelines is to facilitate the outside actuary personnel to prepare the auditing report and set forth the scope of what shall be included in the auditing report.
Reported by:David Tsai/ Angela Chang
9. Amendment to the Securities Investment Trust and Consulting Association of the R.O.C.'s template for Anti-Money Laundering and Countering Terrorism Financing Guidelines for Securities Investment Trusts and Consulting Businesses (SITE and SICE)
The Securities Investment Trust and Consulting Association (SITCA) issued a ruling (Ref. No. Zhong-Xin-Gu-Zi-1040600172) on August 20, 2015, to amend the “Template for Anti-Money Laundering and Countering Terrorism Financing Guidelines for SITE and SICE" for the industry's reference. SITE and SICE shall complete the plan, establishment and control measures related to the risks of money laundering and terrorism financing by January 31, 2016, and implement the same from February 1, 2016. In addition, SITE and SICE shall complete its initial assessment of the risks in connection with money laundering and terrorism financing exposed by it by July 31, 2016, and set up a plan for anti-money laundering and countering terrorism financing accordingly. Furthermore, SICE and SITE are required to file progress reports to the SITCA every two months starting September 2015. The SITCA will then consolidate the reports for the Financial Supervisory Commission.
Reported by:Jeffrey Liu / Judy Tai
10. Amendments to Regulations related to Securities Firms Accepting Orders to Trade Foreign Securities
The Taiwan Securities Association issued a ruling (Ref. No. Zhong-Zheng-Shang-Ye-Zi-1040005448) on August 21, 2015, to amend Article 41 of "Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities" and Article 6-2 of "Operational Rule for Securities Firms Accepting Orders to Trade Foreign Securities". The amendments are to cope with the two following measures:
(1) To permit a securities firm to assist its offshore subsidiary in conducting a client's identity check where its client opens account with it offshore subsidiary and agrees with such check arrangement; and
(2) To permit offshore securities branches ("OSU") to accept orders to trade foreign currency denominated structured products issued by other OSUs according to Item 2, Paragraph 1, Article 22-4 of the Offshore Banking Act.
Reported by:Jeffrey Liu / Judy Tai
11. Amendments to "Regulations Governing Responsible Persons and Associated Persons of Securities Firms" and "Regulations Governing Responsible Persons and Associated Persons of Futures Commission Merchants "
On August 28, 2015, the FSC issued a ruling (Ref. No. Jin-Guan-Zheng-Quan-Zi-1040034734) to announce the amendments to "Regulations Governing Responsible Persons and Associated Persons of Securities Firms". We reported the major points of the draft amendments in point 10 of Issue No. 229 of the Lexgroup Newsletter. Furthermore, the FSC also issued a ruling (Ref. No. Jin-Guan-Zheng- Qi -Zi-1040034832) to announce the amendments to Article 7 and 7-1 of the "Regulations Governing Responsible Persons and Associated Persons of Futures Commission Merchants ".
Reported by:Jeffrey Liu / Caitlyn Kao
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2015-09-08
