An amended version of the “Securities Investor and Futures Trader Protection Act” (hereinafter, “the Protection Act”) was passed by the Legislative Yuan on 22 May 2020 and promulgated by the President on 10 June, then the Executive Yuan agreed to have it enter into force from 1 August. Articles 10-1, 19, and 26 were revised, while two other new articles (Articles 10-2 and 40-1) were added. Key points of the amendments include the following: 

1.The amended Act expressly provides that market price manipulation, insider trading, fraud, and other behavior that undermines market order constitute cause for the Securities and Futures Investors Protection Center (the “protection institution” established under the Protection Act) to file derivative suits and discharge suits.

2.The amended Act includes the directors and supervisors of emerging stock companies among the persons against which the protection institution may file derivative suits and discharge suits.

3.Newly added content empowers the protection institution to file a class action suit against a past director or supervisor, and provides that the protection institution may, with respect to the same underlying transaction or occurrence, join a suit as a co-party or file additional claims against those who should duly be held liable for compensation for that transaction or occurrence and who furthermore manage the operation of the company and are authorized to sign relevant business documents for the company.

4.The causes for which a discharge suit may be brought against a director or supervisor will no longer be limited to causes that occurred during the term the director or supervisor was serving at the time of filing of the suit, and a director or supervisor who is discharged from office by a decision of a court shall not be appointed as a director or supervisor of a TWSE-listed, TPEx-listed, or emerging stock company within 3 years after the court decision becomes final and non-appealable.