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Press Release

Preannouncement of the Draft Amendments to Some Clauses of Regulations Governing the Administration of Shareholder Services of Public Companies and Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies

2022-01-21
To bring practice into line with the Company Act, which allows public companies to convene virtual shareholder meetings, the Financial Supervisory Commission (FSC) is planning on amending sub-regulations such as Regulations Governing the Administration of Shareholder Services of Public Companies and Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies after reviewing foreign systems, local experience in shareholder meetings with video conferencing as assistance amid pandemic, and shareholder meeting practical operation. By making related regulations more well-rounded, the amendments will help the market have a smooth-running introduction of virtual shareholder meetings in 2022. It will also be conductive for better shareholder activism.
The summarized important aspects of amendments of the Regulations Governing the Administration of Shareholder Services of Public Companies and Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies are as follows:
I.    To better meet pandemic prevention measures and practical needs, public companies are allowed to convene hybrid meetings (i.e. physical shareholder meetings with video conferencing as assistance) and virtual-only meetings (i.e. 100% virtual shareholder meetings with no physical meetings).
II.    To ensure shareholders’ rights, it is explicitly stipulated that if companies plan to convene virtual meetings, including virtual-only and hybrid shareholder meetings, they must have it written in their articles of incorporation and approved by their board of directors. In the event of natural disasters, incidents, or other force majeure, the Ministry of Economic Affairs (MOEA) may announce that companies may not need to have the said types of meetings written in their articles of incorporation within a specified period. In addition, since hybrid meetings can help protect shareholders’ rights, hybrid meetings with special resolutions at the board of directors meetings will be exempted from the said articles of incorporation restrictions within one year after adopting the revised regulations. 
III.    Companies that plan to convene virtual-only shareholder meetings should meet the following requirements:
(i)    Shareholder meetings do not have motions to elect directors and/or supervisors.
(ii)    Shareholder meetings do not have motions to dismiss directors and/or supervisors.
(iii)    Shareholder meetings do not have motions (i.e. significant mergers and acquisitions) specified in Article 185 and 316 of the Company Act, Article 18, 27, 29 and 35 of the Business Mergers And Acquisitions Act, or Article 24 Paragraph 2 Item 1 and Article 26 Paragraph 2 Item 1 of the Financial Holding Company Act.
(iv)    Companies whose stocks are not listed on the stock exchange or traded on the over-the-counter (OTC) market should outsource shareholder services agencies to handle their shareholder services.
IV.    Companies that plan to convene hybrid shareholder meetings should meet the following requirements:
(i)    Shareholder meetings do not have motions to elect directors and/or supervisors, or if they do, the number of the candidates should not exceed the quota of the directors and supervisors to be elected.
(ii)    Shareholder meetings do not have motions to dismiss directors and supervisors.
(iii)    Companies whose stocks are not listed on the stock exchange or traded on the OTC market  should outsource shareholder services agencies to handle their shareholder services.
V.    To ensure the secure and neutral nature of the virtual communications deployed for shareholder meetings, providers of virtual meeting platforms should meet related requirements and should report to and be examined by the FSC before they commence their work.
VI.    To ensure shareholders understand how to participate in virtual shareholder meetings and how to exercise relevant rights, it is explicitly stipulated that companies that plan to convene virtual shareholder meetings should clearly incorporate associated matters in their shareholder meeting notice, including shareholders’ participation methods and ways of exercising their rights, countermeasures against virtual meeting failures caused by force majeure events or other problems and the new dates of shareholder meetings if they need to postpone or reconvene meetings, as well as proper alternative measures for shareholders who have difficulty attending shareholder meetings virtually.
VII.    To reflect the diversity of shareholders’ attendance at of or participation in shareholder meetings, relevant procedures should be formulated, including circumstances where shareholders, solicitors, and proxy agents register for online attendance, where shareholders have registered for attending shareholder meetings virtually but wish to attend the shareholder meetings physically, and where shareholders have exercised their voting right via written or electronic means but wish to attend virtual shareholder meetings.
VIII.    To safeguard shareholders’ rights, it is explicitly stipulated that shareholders who have exercised their voting right via written or electronic means and haven’t withdrawn their declaration of intent may still attend shareholder meetings virtually. However, they can only exercise their proposing and voting rights regarding extempore motions. In addition, they cannot vote on the original meeting proposals and the amendments to the content of the original meeting proposals, or propose to amend the content of the original meeting proposals.
IX.    Considering that the participation procedures of virtual meetings and the results of the resolutions at shareholder meetings are closely connected to shareholders’ rights, relevant regulations are explicitly stipulated, including the check-ins, live streaming, raising questions, voting, ballot counting, proposing extempore motions, proposing to amend the content of the original meeting proposals, and other meeting process-related matters, shareholders’ right of registration for online attendance after having exercised their voting right via written or electronic means, as well as the ways companies reveal the results of motions and elections.
X.    To ensure companies make contingency plans for disconnection issues in shareholder meetings when they are unable to continue due to force majeure events that prevent the operating of their virtual platforms or that prevent shareholders from attending meetings virtually, regulations are explicitly stipulated, including the deadlines of shareholder meetings if they need to postpone or reconvene their meetings, the principles that they will follow to determine whether to postpone or reconvene their meetings, as well as related meeting process.
XI.    To inform shareholders of the situation of shareholder meetings, the minutes content of virtual shareholder meetings is stipulated. Other regulations are also formulated to serve as a way of clarification when disputes regarding shareholder meetings occur. Companies and their shareholder services agencies should follow the relevant regulations on sign-ups, registration, check-ins, raising questions, voting, ballot counting, and the record retention for the audio or video recording of their meetings.
XII.    When companies convene virtual shareholder meetings, they should help shareholders familiarize themselves with the virtual meeting platforms so that shareholders can properly exercise their rights. Therefore, companies that plan to convene virtual-only or hybrid shareholder meetings should specify the chosen virtual meeting platforms in their agenda handbooks.
XIII.    To make it convenient for shareholders who attend virtually to read shareholder meetings’ agenda handbooks and meeting information at shareholder meetings, companies that convene virtual-only or hybrid shareholder meetings should upload their agenda handbooks and meeting information to their virtual meeting platforms.
According to the FSC, the draft will be published on the Executive Yuan Gazette Online. The general explanation of the draft and the parallel texts of the amended clauses will also be published on the FSC website to collect public opinions. Anyone who wishes to comment on the matter is welcome to visit the Draft Preannouncement webpage on the FSC Law and Regulations Retrieving System (http://law.fsc.gov.tw/) or contact the FSC Securities and Futures Bureau (SFB) within 30 days after the day of the preannouncement.

Point of Contact: Mr. Chen, Section Chief, Securities Trading Division, Securities and Futures Bureau
Tel: 02-2774-7310
For any questions, please e-mail to: FSCMAIL
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  • Update: 2022-01-24
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