The Taiwan Monthly

Important Announcement

The amendments 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 published on Jan. 30, 2024

Following the amendments of the Article 43-1 Paragraph 1 of the Securities and Exchange Act on May 10, 2023, lowering the threshold for reporting the acquisition of large shareholdings from 10% to 5% with a 1-year buffer period prior to the effective date, the Financial Supervisory Commission (FSC) has amended 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"). Related measures were adjusted to improve reporting efficiency and supervision performance. After the two-month notice of proposed rulemaking process, the Amended regulations have been published and will come into effect on May 10, 2024. Key points of the amendments are as follows:

 

I.   The threshold for declaration and public disclosure of substantial shareholding is lowered from 10% to 5% in accordance with the amendment to Article 43-1, Paragraph 1 of the Securities and Exchange Act.

II.  The acquirer is currently required to make a public disclosure on the Market Observation Post System and submit a written declaration form to the Competent Authority. To implement energy conservation and carbon reduction and improve reporting efficiency, the FSC maintains the current public disclosure method and requires acquirers to upload a file of the declaration form to the Market Observation Post System instead of sending written declaration form. The Market Observation Post System 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, shouldering the related policy missions and being highly related to public welfare, the special reporting system of filing a declaration and making a public disclosure periodically every six months is applied. In addition, the matters to be specified in the declaration are also simplified.

IV.  To improve supervision efficiency and the quality of information disclosure, the amendments specify that the FSC may commission the TWSE and the TPEx to screen the declaration and public disclosure in accordance with the Regulations.

V.  To ensure the transparency of company shareholdings and legal certainty, the amendments specify that if an acquirer (including pension and insurance funds managed by the government) acquires more than 5% but less than 10% of any public company's outstanding shares before the amendments come into force and continue to hold the shares until the amendments effective date, the acquirer shall file an initial declaration and make a public disclosure within 10 days after the amendments come into force. 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.

 

For the purpose of improving corporate governance quality and protecting investor rights, the FSC stated that the amendments are to keep up with foreign legislation trends, and ensure timely disclosure of substantial shareholding while taking the practical operation into account.

 

For further inquiries, please contact Ms. Lin at 1065@twse.com.tw.