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Advance Notice Procedure for the Draft Amendment to the "Regulations Governing the Declaration of Acquisition of Shares in Accordance with Article 43-1, Paragraph 1 of the Securities and Exchange Act" Has Been Completed and the Amended Versions Will Be Released soon.


The Financial Supervisory Commission (FSC) has made an amendment to the "Regulations Governing the Declaration of Acquisition of Shares in Accordance with Article 43-1, Paragraph 1 of the Securities and Exchange Act" (hereinafter referred to as the "Regulations") in response to an amendment to Articles 43-1 and 183 of the Securities and Exchange Act promulgated on May 10, 2023, which lowers the threshold for reporting substantial shareholding from 10% to 5% and will take effect one year after promulgation. Related measures were adjusted to improve reporting efficiency and supervisory performance. The advance notice procedure for the draft amendments has been completed and the amended regulations will be released soon and take effect on May 10, 2024. Key points of the amendment are as follows:

I.    The threshold for declaration and public disclosure of substantial shareholding is lowered from 10% to 5% in response to the amendment to Article 43-1 of the Securities and Exchange Act.
II.    The acquirer is currently required to make a public disclosure on the Market Observation Post System (MOPS) website and submit a written declaration form to the Competent Authority. To implement energy conservation and carbon reduction and improve reporting efficiency, the FSC plans to maintain the current public disclosure method and require acquirers to upload a file of the declaration form to the MOPS website instead of submitting a written declaration form. The MOPS will then notify the acquiree company, the Taiwan Stock Exchange Corporation (TWSE), or the Taipei Exchange (TPEx). 
III.    If the acquirer is a pension or insurance fund managed by the government, it is different from general acquirers since it shoulders the mission of related policies and is highly related to public welfare. Hence, the special reporting system of filing a declaration and making a public disclosure periodically every six months is applicable to such acquirers. The matters to be specified in the declaration are also simplified.
IV.    To improve supervisory efficiency and the quality of information disclosure, the amendment expressly states that the FSC may commission the TWSE and the TPEx to handle declarations and public disclosures made by acquirers in accordance with the Regulations.
V.    To ensure the transparency of company shareholdings and legal certainty, the amendment expressly states that if an acquirer (including pension and insurance funds managed by the government) acquires more than 5% but not more than 10% of any public company's total issued shares before the enforcement date of the amendment and continues to hold the shares until the enforcement date of the amendment, the acquirer shall file an initial declaration and make a public disclosure within 10 days after the enforcement date of the amendment. Considering the burden of declaration and the benefits of disclosing shareholding information, the matters to be specified in the initial declaration and public disclosure are simplified.

The FSC stated that the purpose of amendment is to keep up with foreign legislation trends and ensure prompt disclosure of substantial shareholding while taking the practical operation into account. It will improve our corporate governance quality and protect investor rights at the same time.

Contact person: Securities Trading Division, Securities and Futures Bureau 
Contact number: (02)2774-7223
Should you have any questions, please visit fscmail and raise your queries.
 
Visitor: 3813   Update: 2024-01-29
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