1.The FSC Issued Regulations Regarding Regulatory Reporting, Public Disclosure, and Other Matters Required When Persons Acquiring, Individually or Jointly with Others, a Large Quantity of Shares of a Public Company

To align with the amendment to paragraph 1, Article 43-1 of the Securities and Exchange Act, promulgated on 17 April 2019, the Financial Supervisory Commission (FSC) issued the “Regulations Governing the Declaration on Acquisition of Shares in Accordance with Paragraph 1, Article 43-1 of the Securities and Exchange Act” on 7 October 2019. It stipulated that any person who acquires, either individually or jointly with other person(s), more than 10% of the total issued shares of a public company, shall report to the competent authority and make a public disclosure on the Market Observation Post System (MOPS) in compliance with the reporting/disclosure requirements concerning the number of shares acquired, the purpose and the sources of funds for the acquisition, changes in the information reported, public disclosure, time limits, and any other matters required.

2.The FSC Issued Order Stipulating That Persons Acquiring Shares of a Public Company for the Purpose of Merger and Acquisition Shall File Regulatory Reporting and Make Public Disclosure Pursuant to the “Regulations Governing the Declaration on Acquisition of Shares in Accordance with Paragraph 1, Article 43-1 of the Securities and Exchange Act” as Applied Mutatis Mutandis

To align with the “Regulations Governing the Declaration on Acquisition of Shares in Accordance with Paragraph 1, Article 43-1 of the Securities and Exchange Act” issued on 7 October 2019, the FSC issued an Order on 9 October 2019. It stipulated that an person who acquires shares of a public company for the purpose of merger and acquisition under Article 27, paragraph 14 of the Business Mergers And Acquisitions Act, shall report the required information set out in the “Regulations Governing the Declaration on Acquisition of Shares in Accordance with Paragraph 1, Article 43-1 of the Securities and Exchange Act”. In addition, to facilitate the acquirer’s reporting on his or her equity holding(s), the original report forms were amended in harmony with the above Regulations.

3.The FSC Issued the “Operation Directions Governing Securities and Futures Businesses’ Application for the Approval of Business Trials”

The FSC issued the “Operation Directions Governing Securities and Futures Businesses’ Application for the Approval of Business Trials” on 3 October 2019. This securities and futures businesses are allowed to apply for business trials. However, the permitted business are limited to：(1) extension of approved business activities of securities and futures businesses, (2) “other business activities ” that regulations authorize the competent authority may grant approvals at discretion, or (3) the internal operations of securities and futures businesses which are not specified by the regulations. In applying to conduct the business trials, securities and futures businesses are required to submit business plans covering relevant operational guidelines, risk management, and internal controls, together with a statement of legal compliance. During the course of pilot operations, they shall also implement legal compliance practices such as information security and protection and anti-money laundering controls, protection of personal data, and protection of customer rights and interests.

4.The FSC Relaxed Net Capital Requirement for Taiwanese Branch Offices of Foreign FCMs Exclusively Engaged in Sub-Brokerage

The FSC issued Order No. 1080360743 on 30 October 2019  stipulating that the Taiwanese branch office of a foreign futures commission merchant (FCM) exclusively engaged in sub-brokerage is eligible, upon obtaining FSC approval, for exemption from the adjusted net capital percentage requirement set out in paragraphs 1 and 2,Article 22 of the Regulations Governing Futures Commission Merchants, provided that its head office calculated the net capital amount or percentage satisfied the criteria set by the home country and included the operational risks of the Taiwanese branch office. The branch office is still required to file a monthly report on the net capital amount or percentage of its home-country head office and other specified information, unless obtaining FSC approval to exempt from reporting, so as to facilitate a timely understanding of the financial and operational conditions of the foreign FCM. However, if the home-country head office fails to comply with the regulatory criteria of the home country, the branch office shall immediately stop accepting brokerage orders from Taiwanese FCMs and limit its sub-brokerage activities only to handling of existing transactions, and shall submit a corrective plan to the FSC.