Lexgroup Newsletter (Issue No.330)

Date: Dec 2019

Securities & Futures

1. Directions for Securities and Futures Enterprises to Apply for New Business Trial

On 3 October 2019, the Financial Supervisory Commission (FSC) announced the Directions for Securities and Futures Enterprises to Apply for New Business Trial (Directions).  We summarize the key points below:

(1) The business items that the securities and futures enterprises may apply for trial must be an expansion of the business items that have been approved, or where it is expressly stipulated under the laws or ruling with "others approved by the competent authority", or where it is not clearly stipulated in the technical requirements. 

(2) For the new business approved which is not prohibited under laws and regulations, a securities and futures enterprise may still apply for the new business trial with the FSC. For the business which is prohibited under the laws, it must be applied for under the sand box rules.   

(3) The business plan and legal compliance statement must be submitted. 

(4) The FSC may impose restrictions on the clients, business or trading volume, location and period based on the nature of the new business.    

(5) The securities and futures enterprises shall be conscious on the matters including information security, anti-money laundering, personal information protection and client interest protection during the trial period, and report the entire status of the trial to the FSC for recordation after the expiration of the trial period.  

(6) If the business trial involves other laws and regulations, relevant approvals shall be obtained from relevant competent authorities. If the business trial involves foreign exchange, the approval of the Central Bank of Republic of China (Taiwan) shall be obtained.  

Reported by: Jeffrey Liu/Jack Tai

Securities and Exchange Act

2. Promulgation of Regulations for Filing Reports on Acquisition of Shares in accordance with Paragraph 1, Article 43-1 of Securities and Exchange Act

On 7 October 2019,the FSC announced the "Regulations for Filing Reports on Acquisition of Shares in accordance with Paragraph 1, Article 43-1 of Securities and Exchange Act".  For more details, please refer to Item 5 of our Newsletter with Issue No. 324.

Reported by: Mike Lu/Angela Lin

3. A Ruling in Relation to Report of Shares Acquisition in Accordance with  Paragraph 14, Article 27 of the Business Mergers and Acquisitions Act

On 9 October 2019, the FSC issued a ruling that for the report of acquiring more than 10% shares of any public reporting company for merger/acquisition purpose as required under Paragraph 14, Article 27 of the Business Mergers and Acquisitions Act, the relevant requirements under the "Regulations for Filing Reports on Acquisition of Shares in accordance with Paragraph 1, Article 43-1 of Securities and Exchange Act" shall be applied mutates mutandis.

Reported by: Mike Lu/Angela Lin

SITE/SICE

4. Amendments to SITCA's Model Sample and Guidelines for Anti-money Laundry and Counter Terrorism Financing

On 9 October 2019, the Securities Investment Trust and Consulting Association (SITCA) issued a ruling to amend by its "Model Samples for Securities Investment Trust and Consulting Enterprises Anti-Money Laundering and Counter Terrorism Financing" (Model Samples) and the "Guidelines for Establishing Relevant Prevention Measures and Assessing Risks of Money Laundering and Terrorism Financing for Securities Investment Trust and Consulting Business (Guidelines). The amendments are in response to the amendments to revenant laws and regulations, including (i) "Regulations Governing Internal Audit and Internal Control System of Anti-Money Laundering and Countering Terrorism Financing of Securities and Futures Business and Other Financial Institutions Designated by the Financial Supervisory Commission", (ii) "Regulations Governing Reporting on the Properties or Property Interests and Locations of Designated Sanctioned Individuals or Entities by Financial Institutions", (iii) "Counter-Terrorism Financing Act" and (iv) "Regulations Governing Anti-Money Laundering of Financial Institutions".

Reported by: Jeffrey Liu/Cindy Chien

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