The FSC amended the aforementioned Regulations on 29 October 2020 in order to increase the flexibility in business management of securities firms. Key points of the amended provisions are as follows:

1.In response to Article 228-1 of the “Company Act,” when a securities firm carries out an earnings distribution, or covers a loss, it is required to do so on the basis of a financial report that has been audited and attested by a certified public accountant; in addition, to coordinate with Article 36, Paragraph 1, Subparagraph 1 of the “Securities and Exchange Act,” the Regulations provide that a financial report that a securities firm submits to its board of directors must be signed or sealed by the board chairperson, a managerial officer, and the accounting officer.

2.To afford securities firms better hedging flexibility in issuing of exchange traded notes (ETNs), the amended Regulations expressly provide that securities firms may borrow or short-sell the underlying securities for the purpose of hedging, and are not subject to the relevant selling price restrictions.

3.In order to enhance the quality of securities firms’ credit investigations and credit extension operations, the amended Regulations provide that the Taiwan Stock Exchange may collect, process, and use all kinds of credit information of investors, and may request securities firms and institutions approved by the FSC to provide relevant information. The Taiwan Stock Exchange is also required to formulate relevant operating rules and report to the FSC for approval.

4.The amended Regulations state that where a securities firm is a branch of a foreign company in Taiwan, the matters to be handled by the board of directors or supervisors as prescribed in the Regulations shall, in principle, be handled by the responsible persons of the branch in Taiwan who are authorized by the head office or regional headquarters of the foreign company.