Anti-Money Laundering
1. Announcement on the Implementation of Articles 6 and 11 of Money Laundering Control Act
On 19 November 2024, the Executive Yuan announced that Articles 6 and 11 of the “Money Laundering Control Act,” as amended and promulgated on 31 July 2024, will come into effect on 30 November 2024. We summarize below:
(1) Enterprises or persons that provide virtual asset services or third-party payment services are not allowed to provide services if they have not completed money laundering prevention, service capacity registration or login with the central competent authority in charge of the relevant industries;
(2) Enterprises or persons established overseas that provide virtual asset services and third-party payment services are not allowed to provide services in Taiwan unless they have registered the establishment of a company or branch in accordance with the Company Act and have completed money laundering prevention and service capacity registration or login with the central competent authority in charge of the relevant industries;
(3) During the existence of fiduciary relationship, the trustee of a non-trust enterprise must obtain and hold sufficient, accurate and up-to-date information about the identity of the trust’s settlor, trustee, beneficiary and any other natural person who ultimately effectively controls the trust, and hold other basic information on trust agents and trust service providers, and shall proactively update the declaration information when the information changes; and
(4) The trustee shall retain the information described in the preceding paragraph for at least five years from the termination of fiduciary relationship.
Reported by: Stacy Lo / Sunny Lan
2.Announcement on Reporting, Updating, and Disclosure Regulations for Trustee Information of Non-Trust Enterprises under Paragraph 6, Article 11 of the Money Laundering Control Act
On 25 November 2024, the Ministry of Justice announced the “Regulations on Reporting, Updating, and Disclosing Trustee Information for Non-Trust Enterprises under Paragraph 6, Article 11 of the Money Laundering Control Act” (Regulations). We summarize below:
(1) The Regulations apply to designated non-financial enterprises or persons serving as trustees, as well as other legal persons outside the scope of designated non-financial businesses or persons.
(2) The information to be reported includes:
(a) For natural persons: name, nationality, date and place of birth, household registration address, residential address, national identification number, and tax identification number or equivalent information in the country of residence.
(b) For legal persons: name, nationality, representative, office or business address, and tax identification number.
(c) Other relevant information necessary to identify the individual or entity.
(3) The initial reporting of information must be completed within 30 days of the establishment of the fiduciary relationship; updates to the reported information must be completed within 30 days of any changes.
(4) Trustees of non-trust enterprises must proactively disclose their position in the trust when using trust property to:
(a) Establish business relationships with financial institutions or designated non-financial enterprises or persons.
(b) Conduct temporary transactions with a single or cumulative amount of NT$500,000 or more (including equivalent amounts in foreign currency).
(5) The Regulations shall come into effect on 30 November 2024.
Reported by: Stacy Lo / Sunny Lan
3.Regulations Governing Anti-Money Laundering Registration for Enterprise or Individuals Providing Virtual Asset Services
On 26 November 2024, the Financial Supervisory Commission (FSC) announced the “Regulations Governing Anti-Money Laundering Registration for Enterprise or Individuals Providing Virtual Asset Services.” We summarize below:
(1) Enterprise or Individuals Providing Virtual Asset Services (Virtual Asset Service Providers, VASPs) shall conduct anti-money laundering registration according to their business type, including virtual asset exchange providers, trading platforms, transfer agents, custodians, and underwriters. Those who fail to complete the registration are prohibited from operating. Additionally, unless obtaining the required permits or approvals, the VASPs are prohibited from operating businesses that require such permits or approvals under other laws and regulations.
(2) Conditions and procedures for registration.
(3) General compliance requirements for VASPs (including legal compliance, fiat currency retention obligations, information systems and security, customer complaint handling, information disclosure and announcement, record retention, and other matters), as well as specific requirements for each type of business activity.
(4) VASPs that have completed the anti-money laundering compliance declaration must register with the FSC within 3 months after the registration system takes effect, and complete the registration within 9 months after the regulations come into effect.
Reported by: Stacy Lo / Eva Chiu
Property
4.Amendments to Urban Renewal Act
On 13 December 2024, the President announced the amendment to Article 65 of the Urban Renewal Act. Please refer to No.451 for the content of the amendment.
Reported by: Kangshen Liu / Alex Li
Electronic Signature
5.Amendment to Enforcement Rules of Electronic Signatures Act
On 14 November 2024, the Ministry of Digital Affairs announced the amendment of the “Enforcement Rules of Electronic Signatures Act”. We summarize below:
(1) Considering that Paragraph 4, Article 5 of the Electronic Signatures Act stipulates that the counterparty shall be given an opportunity to refuse adopting electronic forms within a reasonable period of time and method, the details of reasonable period of time and method is added;
(2) To add the required documents for a certification service provider not being a government agency to apply for permission from the competent authority;
(3) To add that if necessary the competent authority may conduct inspections on the certification service providers’ execution of services provided in accordance with the certification practice statements; and
(4) To add that the competent authority may request certification service providers to provide information for industry survey.
Reported by: Stacy Lo/ Zoe Chen
Labor
6.The Wage Classification Table for Labor Occupational Accident Insurance
Due to the adjustment of the minimum monthly wage to NT$28,590, the labor pension monthly contribution grading table has been amended to include a new level corresponding to NT$28,590 , which will take effect from 1 January 2025.
Reported by : David Tsai/ Julia Kuo
7.The Labor Pension Monthly Contribution Grading Table
Due to the adjustment of the minimum monthly wage to NT$28,590, the wage classification table for labor occupational accident insurance has been revised accordingly. The monthly insured salary for Level 1 is adjusted to NT$28,590, but the monthly insured salary of NT$27,600 for Level 2 has been deleted. The monthly insured salary of NT$28,800 for Level 3 is moved to Level 2. This amendment will take effect on 1 January 2025.
Reported by : David Tsai/ Julia Kuo
SITE/SICE
8.Draft Ruling Regarding New Types of Business for SITE/SICE Under Article 4.3.3 of the Securities Investment Trust and Consulting Act- Family Office
On 21 November 2024, the FSC announced a draft ruling allowing Securities Investment Consulting Enterprises (SICE) (including Securities Investment Trust Enterprises (SITE) concurrently operating SICE business) to accept clients’ engagement to collaborate with professionals or firms offering services such as trust, finance, accounting, legal, tax, philanthropy, and education for providing family office integration consulting services. We summarize below:
(1) SICEs providing family office integration consulting services shall have relevant internal control or internal management systems in place.
(2) SICEs shall apply for approval and enter into a family office integration consulting agreement with the client to provide the services.
(3) After being approved by the FSC, SICEs shall submit quarterly reports to the Securities Investment Trust and Consulting Association of the R.O.C. (SITCA) within five business days after the end of each quarter.
Reported by: Jeffrey Liu / Jason Su
9.Regulatory Rules on Utilization of Robo-Advisor by Securities Investment Consulting Enterprise and Related Ruling
On 18 November 2024, the FSC announced the ruling related to “Paragraph 1 and 3, Article 25-5 of the Regulations Governing Securities Investment Consulting Enterprises.” In addition to the textual adjustments made to align with the regulations related to robo-advisor services, which have been incorporated into the Regulations Governing Securities Investment Consulting Enterprises, the implementation methods for portfolio rebalancing, as agreed upon with clients, stipulated in the former “Direction on the Utilization of Robo-Advisors by Securities Investment Consulting Enterprises” (Direction), have also been consolidated. Other contents, such as execution thresholds and agreed conditions for rebalancing transactions, remain unchanged.
Furthermore, the SITCA issued the “Regulatory Rules on the Utilization of Robo-Advisors by Securities Investment Consulting Enterprises ” (Regulatory Rules) on 21 November 2024 to replace the above-mentioned Direction. The main differences between the Regulatory Rules and the include: (1) enterprises providing robo-advisor services or changing the algorithms used in these services shall submit relevant documents to the SITCA for review; (2) the enterprises must establish mechanisms to prevent conflicts of interest; (3) the enterprises must enter into securities investment advisory agreements with clients; and (4) the content of the Regulatory Rules shall be incorporated into the internal control or management system, with internal auditors conducting regular or ad hoc audits of financial and business activities and preparing audit reports.
Reported by: Jeffrey Liu / Amy Su
Securities
10.Amendment to Establishing Information Security Inspection Mechanisms for Securities Firms and relevant regulations
On 12 November 2024, the Taiwan Stock Exchange announced the amendment to Article 2 and Article 9 of Establishing Information Security Inspection Mechanisms for Securities Firms, the Standards for Internal Control Systems of Securities Firms, and related application forms. We summarize below:
(1) Securities firms must ensure that their cross-industry collaboration platforms with IT companies do not provide or connect to securities or futures business functions (such as account opening and order placement) offered by unlicensed securities or futures operators not approved by the FSC.
(2) To strengthen business continuity, securities firms meeting the criteria for appointing a chief information security officer must establish off-site backup data centers for their corporate trading systems by the end of 2024.
Reported by: Jeffrey Liu / Winnie Su
| Editors: Mike Lu (Partner) Stacy Lo (Partner) Jeffrey Liu (Partner) Kang-Shen Liu (Partner) David Tsai (Partner) Angela Lin (Partner) Paul Hsu (Partner) | Counselors: Echo Yeh Sue Su Jolene Wang (Lexcel Partners IP Firm) |