Whistleblower Protection Act
1. Draft Whistleblower Protection Act
The Ministry of Justice (MOJ) announced the draft Whistleblower Protection Act (Act) for consultation of public opinions on 23 November 2018. We summarize the key points below:
(1) The competent authority is the MOJ. The competent authority for labor disputes incurred as a result of whistleblowing is the Ministry of Labor.
(2) This Act applies to whistleblowers of both public sectors and private sectors.
(3) Public and private sectors must not take any unfavorable personnel measures against whistleblowers. Such measures, if taken, shall be invalid. Whistleblowers may file a law suit to restore to the original state and claim for compensation.
(4) Whistleblowers are exempted from the civil, criminal or administrative liabilities and relevant disciplines by stating national secrets, trade secrets or other matters which are confidential under relevant laws due to whistleblowing. If whistleblowers are involved into the irregularities by him/herself, criminal liabilities of such whistleblower may be reduced or exempted.
(5) For whistleblowers meeting with certain conditions, the competent authority may provide safety protection to whistleblowers under the Witness Protection Act.
(6) The authority handling relevant matters shall keep whistleblowers' identity in confidential.
Reported by: Mike Lu / Chenchi Wang
2. New Amendment to Regulations Governing the Acquisition and Disposal of Assets by Public Companies will take effect from 1 January 2019
Amendments to the "Regulations Governing Acquisition and Disposal of Assets by Public Companies" announced on 26 November 2018 will take effect from 1 January 2019.
Reported by:Mike Lu / Will Chen
3. Draft Amendments to Applicable Scope of Mandatory Requirement of Establishing Independent Directors and Audit Committee
The Financial Supervisory Commission (FSC) will announce a new ruling in relation to applicable scope of mandatory requirement of establishing independent directors and audit committee soon. We summarize below:
(1) All public companies listed on the emerging securities market shall complete the establishment of independent directors between 2020 and 2022.
(2) Listed non-financial institutions, with paid-in capital of NT$ 2 billion or more but less than NT$ 10 billion, shall complete the establishment of audit committee before the end of 2019. Listed non-financial institutions, with paid-in capital less than NT$ 2 billion, shall complete the establishment of audit committee before the end of 2022.
Reported by: Mike Lu / Will Chen
4. Amendment to Regulations Governing the Investing Activities of a Financial Holding Company, and Announcement of Interpretation Ruling for Paragraph 4, Article 74 of the Banking Act, and Matters to be Complied with by Financial Holding Companies or Banks when Investing in Financial Holding Companies, Banks, Insurance Companies and Securities Firms
On 28 November 2018, the FSC announced the amendment to the "Regulations Governing the Investing Activities of a Financial Holding Company", as well as the interpretation ruling on Paragraph 4, Article 74 of the Banking Act, and the "Matters to be Complied with by Financial Holding Companies or Banks when Investing in Financial Holding Companies, Banks, Insurance Companies and Securities Firms". We summarize the key points below:
(1) As the consolidation policy also applies to investment by a bank investing in a financial holding company (FHC), the FSC issues an interpretation ruling on Paragraph 4, Article 74 of the Banking Act under which the FHC will be deemed as a financial related business designated by the FSC.
(2) The shareholding ratio to be reached by a bank or an FHC (collectively, the Applicant) in its initial investment in FHC, banks, insurance companies and securities firms (financial institutions) is changed from "controlling shareholding (i.e. more than twenty-five percent (25%)" to "more than ten percent (10%) of the outstanding shares with voting rights or total capital amount."
(3) When a venture capital subsidiary of an FHC invests in a business out of the scope of Sub-paragraphs 1-8, Paragraph 2, Article 36 of the Financial Holding Company Act, the FSC's approval is not required.
(4) Except for the investment in foreign financial institutions, the initial investment made by the Applicant in a public financial institutions shall be completed at once via tender offer within three (3) months from the date of approval.
(5) The Applicant has to commit to complete the consolidation within a certain period (up to three years). Failure to do so will be required to divest within a given period unless otherwise approved by the competent authority. Until the consolidation is completed, any further application for investment in another financial institution will not be allowed.
(6) Except where certain conditions have been met, an Applicant who pursues the above investment shall obtain the non-objection resolution from the board of the financial institution to be invested, or reach an agreement with shareholders of the financial institution to be invested with more than 25% shareholding for this share acquisition.
(7) If the investment/ capital increase amount by an FHC in its existing subsidiary is not more than NT$50 million, it is not required to review whether the FHC or its subsidiary has been subject to any sanction, so that the FHC can timely inject capital into its subsidiary.
Reported by: Stacy Lo / Eliza Lee
5. Amendments to Guidelines for Channel Remuneration Payments and Sales Activities for Members and their Sales Agents
On 19 November 2018, the Securities Investment Trust and Consulting Association (SITCA) issued a ruling to amend the "Guidelines for Channel Remuneration Payments and Sales Activities for Members and their Sales Agents". We summarize the key points below:
(1) To specify that sales agents' product presentation sponsored or provided by offshore fund institutions, master agents or securities investment trust enterprise (SITE) is also a kind of employee educational training.
(2) To specify that the above-mentioned product presentation and employee educational training must be held within the territory of Taiwan, unless otherwise necessary to be held offshore. If the training collocates with a tourism arrangement, the training hours for understanding of fund products, market trend and enhancement of the capacity of sales personnel shall be at least half of the total training hours.
(3) To require sales agents to set up selection criteria of proposed personnel for the training so that the master agents or SITEs may evaluate the appropriateness. The criteria shall not be solely linked to sales performance.
Reported by: Jeffrey Liu / Evelyn Shih
6. The Announcement of the Amendment to Employment Service Act.
On 28 November 2018, the president announced the amendment to the Employment Service Act, which has taken effect on 30 November 2018. We summarized the key points below:
(1) Employer is prohibited from discriminating against any job applicant or employee on the basis of constellation and blood type.
(2) When recruiting or hiring employees, if the regular wage of the job vacancy is lower than NT$40,000, the employer shall announce or inform the employee of the range of wage.
(3) The competent authority shall provide assistance to the persons with the qualification of residence care attendant who are willing to be employed.
Reported by: David Tsai / Paul Hsu
7. The Executive Yuan Passed the Draft of New Economic Immigration Act
On 29 November 2018, Executive Yuan passed the draft of "New Economic Immigration Act", the key points of which includes:
(1) Regulations related to the work permit, qualification of employer, terms of employment and application for visa, alien resident certificate and alien permanent resident certificate of foreign technical worker, foreign specialized worker and foreign medium technical worker.
(2) Regulations related to the work permit and residence of overseas citizen engaging in technical work or medium technical work.
(3) Regulations related to the foreign investor or the representative of the foreign investor applying for visa, alien resident certificate and alien permanent resident certificate.
Reported by: David Tsai / Paul Hsu
Act Governing Food Safety and Sanitation
8. Draft Amendment to the Act Governing Food Safety and Sanitation
The Ministry of Health and Welfare announced the draft amendment to the Act Governing Food Safety and Sanitation on 22 November 2018, which removes the rules governing the use of food processing aids from secondary regulations to primary legislation and provides that relevant matters should be promulgated by central competent authority. Provisions about investigation, control and punishment are also added.
Reported by: Kangshen Liu / Chenchi Wang
9. Draft Regulation Governing the Minimum Amount of Donated Property under Paragraph 1, Article 9 of the Foundation Act, Percentage of Cash under Paragraph 2, Article 9 of the Foundation Act and Certain Amount under Subparagraph 3, Paragraph 2, Article 21 of the Foundation Act
The Ministry of Culture announced the draft of the captioned regulation for public consultation on 20 November 2018. We summarize the key points below:
(1) The minimum amount of donated property for a foundation running cultural affairs is NT$30 million;
(2) For a foundation running cultural affairs, the cash shall account for up to two-thirds of the donated property; and
(3) For a foundation running cultural affairs, the certain amount under Subparagraph 3, Paragraph 2, Article 21 of the Foundation Act is NT$1 million.
Reported by: Kangshen Liu / Caitlyn Kao