Fair Trade Act
1. Amendments to the Principles Governing the Fair Trade Commission's Handling of Multi-Level Marketing Cases
The Fair Trade Commission amended the Principles Governing the Fair Trade Commission's Handling of Multi-Level Marketing Cases on January 15, 2016. These amendments subject more multi-level marketing enterprises to business inspection. In addition, the amendments provide that if the outcome of inspection shows that the inspected cases are legitimate or do not significantly affect public interests, such cases may be exempt from disposition through simplified proceedings.
Reported by: Kang-Shen Liu / Robin Huang
Labor
2. Draft Amendments to the Enforcement Rules of Labor Standards Act
On January 13, 2016, the Ministry of Labor announced draft amendments to the Enforcement Rules of the Labor Standard Act. “Heavy work” which shall not be engaged in by child workers is amended to read “hazardous work,” the definition referring to relevant laws and regulations regarding occupational safety and health.
Reported by: David Tsai / Robin Huang
M&A
3. Enterprises Conducting Mergers and Acquisitions through Share Exchanges Shall Not Be Subject to the Mandatory Tender Offer Requirement
The Financial Supervisory Commission (FSC) issued a ruling on January 18, 2016, that a "share exchange" under the Enterprise Mergers and Acquisitions Act falls within "other situations as stipulated by the FSC" under Sub-paragraph 6, Paragraph 2, Article 11 of the Regulations Governing Public Tender Offers for Securities of Public Companies; these can be exempted from mandatory tender offers.
Reported by: Mike Lu / Angela Lin
Insurance
4. Financing Business for Insurance Policy Premium of OIU
On January 19, 2016, the Financial Supervisory Commission (FSC) issued a press release to announce that the FSC has opened the financing business for insurance policies premiums of offshore insurance units (OIUs). Overseas customers may pay the premium for the insurance policies of an OIU through a bank loan after the said business is opened.
Reported by: Stacy Lo / Mark Chen
5. Draft amendment to the "Regulations Governing Foreign Investments by Insurance Companies"
The FSC announced the draft amendment to the "Regulations Governing Foreign Investments by Insurance Companies" on January 26, 2016. We summarize the key points below:
(1) Allowing insurance companies to invest in bonds issued or guaranteed by foreign local governments and specifying the credit rating requirements and the investment limits;
(2) Allowing insurance companies to invest in foreign-currency denominated negotiable certificates of deposit issued by local banks, Taiwan branches of banks in Mainland China or foreign countries (including OBUs) and specifying the investment limits;
(3) Adding certain credit rating requirements for subordinated financial bonds of foreign banks invested by insurance companies;
(4) Adding credit rating as the basis for investment amount control of subordinated corporate bonds invested by insurance companies, and that bonds with different credit ratings shall count towards the investment limits for senior bonds;
(5) Adding that when foreign currency denominated domestic stocks or bonds listed on the local exchange market or traded over the counter are subordinate, they shall be subject to relevant credit rating requirements and count towards investment limits;
(6) Adding that where insurance companies' risk-based capital ratio for the most recent period reaches 250% or above, the total investment in real estate overseas and in the Mainland China area by those investment companies shall not exceed 30% of the owner's equity, and deleting the provision regarding the necessary approval from the FSC;
(7) Adding that when insurance companies make investment in real estate overseas and in the Mainland China area, such investments shall be reviewed by a CPA and specifying relevant disclosure requirements;
(8) Amending that when an insurance company has acquired other real estate in the same country or territory and acquires real estate by ways of the same method provided in Sub-paragraphs, Paragraph 1, Article 11-1, such investment is only required to be filed with the FSC for record;
(9) Adding the credit rating requirements and investment limits for insurance companies to invest in subordinated financial bonds and subordinated corporate bonds in the Mainland China area; and
(10) Adding that the investment amount for insurance companies to establish subsidiaries in Hong Kong and Macau shall also count towards the investment limits on their investments in Taiwan and foreign insurance related enterprises.
Reported by: Stacy Lo / Angela Lin
Intellectual Property
6. Draft Amendments to Enforcement Rules of the Patent Act, Article 86
The Ministry of Economic Affairs announced draft amendments to Enforcement Rules of the Patent Act, Article 86, on January 28, 2016, which allows a patent applicant to apply for a postponement of patent issuance for up to six (6) months, an extension from the current three (3) months in force. Thus, the patent applicant may have more time to consider its needs in industrial policy and to perfect the patent strategy.
Reported by: Jolene Wang / Linda Cheng
7. Time Limits for Patent and Trademark Matters After Introduction of the 24/7 Electronic Filing System
The Taiwan Intellectual Property Office (TIPO) explained in an announcement on January 19, 2016, that for patent and trademark matters adopting the 24/7 electronic filing system, if the last day of the time limit imposed either by statute or TIPO falls on Sunday, national holiday, or any other holiday, the time limit shall expire on the next working day pursuant to Paragraph 4, Article 48 of the Administrative Procedure Act.
Reported by: Jolene Wang / Crick Liang
Food and Drug Administration
8. Amendment to Regulations for Application of Health Food Permits
The Ministry of Health and Welfare (MOHW) announced on January 21, 2016, the promulgation of the amendment to the Regulations for Application of Health Food Permit. We summarize the amendment below:
(1) In view of the amendment to the Standards for Application Fees of Health Food Permit introducing first examination/reexamination fees, the Regulations are amended to separately stipulate the first examination procedure, the reexamination procedure, and their respective requirements.
(2) In view of the amendment to the Act Governing Food Safety and Sanitation defining certain Advisory Committees on food, the Health Food Advisory Committee recited in the Regulations is amended to read Health Food Review Panel to prevent any ambiguity.
Reported by: Jolene Wang / Crick Liang
9. Draft Regulations Governing the Labeling of Chocolates
On January 29, 2016 the MOHW announced for public consultation the draft Regulations Governing the Labeling of Chocolates, which are scheduled to come into effect on July 1, 2017. The key points are:
(1) Defining “chocolates”: solid dark chocolates, milk chocolates and white chocolates made from cocoa products, without fillings and wherein sugars, milk products, food additives, etc. may be added;
(2) Stipulating how chocolates with specified ingredients and composition ratios must be labeled. The allowed product name includes: dark chocolate (or simply, chocolate), white chocolate (or chocolate), and milk chocolate (or chocolate);
(3) Stipulating that labeling must be provided for chocolates using vegetable oils in place of cocoa butter.
Reported by: Jolene Wang / Crick Liang
Securities Firms
10. New Loan Business for Securities Firms
On 18 January 2016, the FSC issued a ruling (Ref. No. Jin-Guan-Zheng-Quan-Zi-1040053607) to expand the loan business which can be undertaken by securities firms. In the future, clients of securities firms may use securities, such as stocks or beneficiary certificates of onshore funds, as collateral to borrow money from securities firms for any purpose. Securities firms complying with certain conditions may file an application with the Financial Supervisory Commission. The Regulations Governing Borrowing or Lending Money in Connection with Securities Business by Securities Firms shall apply mutatis mutandis to the term of loan, scope of the collaterals and so on. In addition, such business conducted by securities firms shall be subject to the operation guidelines to be promulgated by the Taipei Exchange.
Reported by: Jeffery Liu / Caitlyn Kao
11. Investment in Company Stocks for Equity Crowdfunding on Crowdfunding Platform by Professional Securities Brokers
On January 27, 2016, the FSC issued a ruling (Ref. No.: Jin-Guan-Zheng-Quan-Zi-1050001410) to permit professional securities brokers to use their self-owned capital to invest in stocks issued by companies conducting equity crowdfunding on a crowdfunding platform set up by a professional securities broker. The ruling also provides the investment limits in this regard.
Reported by: Jeffery Liu / Judy Tai
12. Object of the securities day trading
On January 27, 2016, the FSC issued a ruling (Ref. No.: Jin-Guan-Zheng-Jiao-Zi-1040053364) to include into the scope of day trading the securities that qualify for securities margin trading.
Reported by: Jeffery Liu / Judy Tai
Securities Investment Trusts Enterprises and Consulting Enterprises
13. SITE/SICE-related Ruling
On 18 January 2016, the FSC issued a ruling (Ref. No.: Jin-Guan-Zheng-To-Zi-1040052859) to allow the chairman, general manager and managers of Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises (SITEs/SICEs) which act as master agents to concurrently serve as directors or supervisors of the company engaging in funds distribution business via the Internet and incorporated by Taiwan Depository & Clearing Corporation and Taipei Exchange, provided they have obtained the FSC's prior approval. In addition, SITEs/SICEs shall report to the Securities Investment Trust & Consulting Association for registration if any general manager and/or managers have the above-mentioned arrangements.
Reported by: Jeffery Liu / Caitlyn Kao
Finance
14. Complex and high-risk derivatives
In order to strengthen the regulation and supervision of complex and high-risk derivatives, the FSC announced an amendment to the Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business (Regulations) on January 30, 2016. For more information, please refer to item 4 of Issue No. 237(I) of Lexgroup Newsletter.
In addition, the FSC also issued a press release to explain the above Regulations and relevant rulings and the following matters related to the regulation on these types of derivatives:
(1) Subject to the consent of clients, the overseas branches designated by the FSC shall report transaction information in accordance with the Regulations;
(2) The banks shall not conduct a new transaction with a client using certain methods, such as increase of transaction limit or contract extension. This may lead the clients to mark up the loss through a short-term premium or interests, and take a greater risk in the future;
(3) In response to the sharp fluctuations of international exchange rates, the FSC has issued a letter to remind banks of response measures and to request the banks to establish relevant handling measures, such as analyses of client exposure, handling measures for client defaults, etc.; and
(4) the FSC will require certain banks to set a transaction amount limit on complex and high-risk derivatives.
Reported by: Stacy Lo / Mark Chen
Hotel Enterprises
15. Amendments to the Regulations for Administration of Tourist Hotel Enterprises
The Ministry of Transportation and Communications amended the Regulations for Administration of Tourist Hotel Enterprises on January 28, 2016. The key amendments are:
(1) When a tourist hotel fails to obtain the construction permit or occupancy permit or fails to apply for operation within the prescribed period, the establishment permit granted to it shall become invalid; and
(2) If a tourist hotel is set to be constructed in several phases or different sections, it may also apply for regulator's inspection and commencement of operation specifically for the constructed and inspected part.
Reported by: Kang-Shen Liu / Mark Chen
2016-02-02
