1.    In response to the consolidation of the Emerging Stock Market (ESM) and the allowing of simplified public issuance procedure across the ESM, the Financial Supervisory Commission amends 8 relevant regulations and interpretations, including the Regulations Governing the Offering and Issuance of Securities by Securities Issuers
In order to streamline the multi-level capital market and to facilitate small and medium-sized enterprises' early entry to the capital market to raise funds for development, the Financial Supervisory Commission (FSC) on 22 August 2023 approved the Taipei Exchange's (TPEx) proposal of consolidating the Emerging Stock Market (ESM), then consisting of the Emerging Stock Board (ESB) and the Pioneer Stock Board (PSB), into a single board as a preliminary market prior to listing on the Taiwan Stock Exchange (TWSE) or on the TPEx, and of allowing the adoption of simplified public issuance procedure for the entire ESM. Accordingly, on 29 December 2023 the FSC issued amendments to four regulations, namely, the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, the Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses, and the Regulations Governing Book-Entry Operations for Centrally Deposited Securities, as well as four administrative directions. The key points of the amendments are as follows:
(1)    The PSB-related provisions are deleted in response to the ESM consolidation: The deleted PSB-related provisions include those relating to the definition of "Pioneer Stock Board company," reference price calculation methods for publicly offered and privately placed securities, information to be disclosed in prospectuses, centralized settlement of trades, and the allowed exemption from relevant requirements for liquidity providers' quotes.
(2)    Companies are allowed to choose to adopt the simplified public issuance procedure in applying for ESM registration: Relevant provisions that were originally applicable to companies applying for PSB registration are now applicable to all companies applying for ESM registration, including provisions that the financial report for the most recent fiscal year may be annexed to the prospectus to meet the relevant financial reporting requirement when filing for registration of an initial public offering of a stock, and that the scope of special audits of internal control systems by certified public accountants (CPAs) may be reduced and the period to be covered may be shortened to half a year.
(3)    The enforcement dates are set: The amended articles of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, and the Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses are set to be enforced from 1 January 2024. Given the settlement needs of the PSB final trading day, the amended articles of the Regulations Governing Book-Entry Operations for Centrally Deposited Securities are set to be enforced from 4 January 2024.
2.    The FSC issues partial amendments to the Regulations Governing Public Tender Offers for Securities of Public Companies and the Regulations Governing Information to be Published in Public Tender Offer Prospectuses
In order to fully protect the rights and interests of tenderers taking part in public tender offers and comply with Article 43-1, paragraph 1 of the Securities and Exchange Act, in which the threshold for filing and announcing large holdings has been revised to 5%, the FSC on 4 December 2023 issued amendments to the above-referenced Regulations. The key points of the amendments are as follows:
(1)    Amendments to some articles of the Regulations Governing Public Tender Offers for Securities of Public Companies :
A.    In order to strengthen the ability of the offeror to fulfill the settlement obligation, it is added that a certificate of ability to pay the consideration is required if the offeror provides domestic securities for the consideration.
B.    Considering that the stocks of TWSE- and TPEx-listed companies have been fully issued in scripless form, it is stipulated that when the number of shares to be sold exceeds the predetermined tender offer quantity, the offeror shall purchase the shares from all sellers on a pro rata basis with one share as the smallest unit, and the original provision that the public tender offer of stocks of TWSE- and TPEx-listed companies shall be on a pro rata basis with one thousand shares as the smallest unit is deleted.
C.    It is stipulated that the public tender offer period may be extended only once, and included in the provisions are some of the filing documents mentioned in the Regulations Governing Information to be Published in Public Tender Offer Prospectuses (such as a commitment letter for fulfilling the payment obligation, an independent expert’s appraisal opinion on the reasonableness of the price, and company resolution documents), in order to meet the requirement of authorization clarity. In addition, the conditions under witch a mandatory public tender offer shall not apply have been added, including a situation where the shares of public companies are obtained through share exchange in accordance with the Business Mergers and Acquisitions Act.
D.    Relevant text is amended for compliance with Article 43-1, paragraph 1 of the Securities and Exchange Act, in which the threshold for filing and announcing large holdings has been revised to 5%.
(2)    Amendments to some articles of the Regulations Governing Information to be Published in Public Tender Offer Prospectuses: In order to strengthen the disclosure of information regarding the use of domestic securities for payment of consideration, it is required that the offeror shall issue a commitment letter for fulfilling the obligation to pay consideration; in addition, if the offeror issues new securities for payment of consideration, it shall notify investors of the risks of adopting an alternative method in the event it is unable to issue such securities in time, and shall specify the alternative method for payment of consideration (cash or other securities) under such circumstances.
3.    The FSC issues amendment to Article 6 of the Regulations Governing Content and Compliance Requirements for Shareholders' Meeting Agenda Handbooks of Public Companies
To enable investors to be aware of all the proposals on the agenda for regular shareholders' meetings of TWSE- and TPEx-listed companies as soon as possible and provide shareholders sufficient time to understand the relevant information of the shareholders' meeting materials, so as to facilitate shareholders' exercise  of rights at the shareholders' meetings, the FSC issued amendment to the above-referenced Regulations on 8 December 2023 to expand the scope of the TWSE- and TPEx-listed companies that are required to disclose shareholders' meeting agenda handbooks and the supplemental materials by 30 days before their regular shareholders' meetings. The main content of the amendment is that in the case of a TWSE- or TPEx-listed company with paid-in capital reaching NT$ 2 billion or more as of the last day of the most recent fiscal year, or in which the aggregate shareholding percentage of foreign investors and mainland Chinese investors reaches 30% or more as recorded in the shareholders' register at the time of holding the regular shareholders' meeting in the most recent fiscal year, the company shall upload the electronic files of the shareholders' meeting agenda handbook and relevant supplemental materials to the information disclosure website specified by the FSC by 30 days prior to the regular shareholders' meeting.
4.    The FSC issues an order requiring the adoption of the candidate nomination system for the director and supervisor elections of Emerging Stock companies starting from 2025
In order to further strengthen corporate governance in Taiwan and implement shareholder activism by facilitating shareholders' exercise of voting rights, the FSC issued the above-referenced order on 29 December 2023, pursuant to the authorization of the proviso of Article 192-1, paragraph 1 and Article 216-1, paragraph 1 of the Company Act, expanding the scope of the companies that are required to adopt the candidate nomination system for the election of directors and supervisors. The order requires that starting from 1 January 2025, the candidate nomination system shall be adopted for the director and supervisor elections of all TWSE-listed, TPEx-listed, and Emerging Stock companies, that the adoption of such system shall be expressly provided in their articles of incorporation, and that the shareholders shall elect directors and supervisors from among the nominees listed in the rosters of director and supervisor candidates.
5.    The FSC issues amendment to the Regulations Governing the Public Offering of Securities Investment Trust Funds by Securities Investment Trust Enterprises, adding Article 3-1 related to the FSC commissioning peripheral organizations with the administration of domestic fund review cases
Given the substantial growth in the number and aggregate size of domestic and offshore funds in recent years, the FSC, after taking into consideration the development of the market, together with the needs of enterprises and the protection of investors' rights and interests, have planned to commission its peripheral organizations to handle fund review cases, to be implemented gradually and phased in over time. Accordingly, on 14 December 2023 the FSC issued amendment to the Regulations Governing the Public Offering of Securities Investment Trust Funds by Securities Investment Trust Enterprises, adding Article 3-1 specifying that the FSC may commission the TWSE, the TPEx, or the Taiwan Depository and Clearing Corporation (TDCC) to handle securities investment trust fund (SITF) public offering, follow-on offering, and extension cases. During the first phase, which will start from 1 January 2024, the above-mentioned peripheral organizations will handle cases involving securities investment trust enterprises' (SITEs) filing for registration of follow-on offerings of SITFs under the 7-business-day effective registration system, filing for registration of SITFs that are limited to domestic investment under the 12-business-day effective registration system (excluding environmental, social, and governance (ESG)-themed funds), and applications for the extension of offering periods.
6.    The FSC issues partial amendment to the Regulations Governing Offshore Funds
In order to enhance case review efficiency and implement differentiated regulatory treatment for offshore funds, and to relax the financial condition requirement for banks to serve as fund sub-distributors, the FSC on 14 December 2023 issued partial amendment to the Regulations Governing Offshore Funds. The key points of the amendment are as follows:
(1)    It is added that the FSC may commission the TDCC to handle offshore fund offering and sale cases.
(2)    It is added that if offshore fund institutions meet certain conditions specified by the FSC, the 45-business-day effective registration system applies to offshore fund offering and sale cases handled by their appointed master agents.
(3)    Given that the financial risks of banks are already regulated under the Regulations Governing the Capital Adequacy and Capital Category of Banks, the financial condition requirement is relaxed allowing banks to serve as fund sub-distributors if they satisfy certain capital adequacy criteria.
7.    The FSC issues amendment to Articles 2 and 8 of the Standards Governing Eligibility of Securities for Margin Purchase and Short Sale
In order to improve the fundraising environment of the Taiwan Innovation Board (TIB), the FSC requested the TWSE to study and propose multiple relaxation measures related to the TIB, including allowing margin trading of TIB-listed stocks. Accordingly, on 28 December 2023 the FSC issued amendments to Articles 2 and 8 of the Standards Governing Eligibility of Securities for Margin Purchase and Short Sale, to be implemented from 1 January 2024. The key points of the amendment are as follows:
(1)    The review criteria for the eligibility of TWSE-listed stocks for margin purchase and short sale apply to TIB-listed stocks: Common stocks listed on the TIB are allowed to be the subjects of margin trading and the review criteria for margin purchase and short sale of TWSE-listed stocks apply to the TIB-listed stocks.
(2)    The review criteria for continuation of margin trading eligibility of TIB-listed stocks after reclassification as TWSE listing: In order to ensure the continuity of the eligibility of TIB-listed stocks for margin purchase and short sale after reclassification as TWSE-listed stocks, eligible TIB-listed stocks are subject to the same rule applicable to TPEx-listed stocks that are eligible for margin purchase and short sale, allowing these stocks to be immediately eligible as the subjects of margin trading after switching to TWSE listing, unless the equity ownership is overly concentrated.
8.    The FSC issues an order on Article 3, paragraph 1 of the Securities Investment Trust and Consulting Act and Article 54 of the Regulations Governing Securities Investment Trust Funds, allowing privately placed securities investment trust funds to invest in private equity funds, and adopts relevant supporting provisions
In order to provide high-asset customers with diversified finance products and to help increase the size of assets under management in Taiwan, the FSC on 29 December 2023 issued an order allowing securities investment trust funds (SITFs) privately placed by securities investment trust enterprises (SITEs) to invest a certain percentage of the SITFs in private equity funds, and adopted supporting provisions governing the conditions for the investee private equity funds and restrictions on the SITEs when utilizing the privately placed SITFs in investment. SITEs are also required to, as a part of their internal control systems, adopt the criteria for selection of private equity funds, risk monitoring and management measures, and relevant valuation policies, operational mechanisms, and other procedures.
9.    The FSC amends the Regulations Governing Applications for CPA Certificates and Practice Registration and the format of relevant forms and documents
With that the Examination Yuan's decision to issue digital certificate for examination passage and successful completion of training, in order to build a better environment to retain international talent in Taiwan, alien resident certificates will be treated as providing proof of identity equal in validity to that provided by a passport, and in response to meet practical needs related to the applications for certified public accountant (CPA) certificates and practice registration, the FSC on 27 December 2023 issued amendments to the above-referenced Regulations. The key points of the amendments are as follows:
(1)    With that the Examination Yuan's decision to issue digital certificate for examination passage and successful completion of training from 2023, the FSC require the CPA certificate applicants to provide a hard copy of their digital certificate of passing the CPA exam. Also, in order to build a better environment to retain international talent in Taiwan, alien resident certificates will be treated as providing proof of identity equal in validity to that provided by a passport when applying for CPA certificate or practice registration.
(2)    To meet practical needs and the principle of legal/regulatory certainty, it is provided that a person applying for a CPA certificate shall submit a statement declaring that the person is free of any of the circumstances set out in Article 6, paragraph 1 of the Certified Public Accountant Act, together with relevant documentary evidence. To apply for practice registration, documentary evidence shall be submitted showing that the person has established or joined a CPA firm as a practicing CPA, as well as CPA association membership application documentation and a register of CPAs.
(3)    In addition, in line with the amendment to the above-referenced Regulations, the FSC on 29 December 2023 amended the format of relevant application forms and documents.
10.    The FSC on 28 December 2023 issues amendments to Articles 10, 11, and 31 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers
Some provisions are amended in line with IFRS amendments to classification requirements regarding current and non-current liabilities and will come into force from the fiscal year 2024. In addition, the definition of "share capital" is amended in line with current practices and relevant disclosure requirements are added, which will come into force from the date of issuance.
11.    The FSC issues amendment to an interpretive order on Article 17 of the Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises Handling Virtual Currency Platform or Transaction
To strengthen the implementation of anti-money laundering controls by enterprises handling virtual currency platforms or transactions (also known as VASPs), and taking the recommendations from the Financial Action Task Force on Money Laundering (FATF), the FSC on 21 December 2023 issued an amendment to an interpretive order on Article 17 of the Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises Handling Virtual Currency Platform or Transaction, adding the requirement that a VASP shall report to the FSC before making any changes to the declarations set out in its AML compliance statement and the circumstances under which the FSC may revoke the VASP's statement, so as to ensure that the VASP remains in compliance with relevant AML/CFT laws and regulations after completing the process for filing the statement. The amendment is set to be effective from 1 February 2024.