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Amendments to Lower the Threshold for the Report and Disclosure of Substantial Shareholding as Approved by the Legislative Yuan
Amendments to Lower the Threshold for the Report and Disclosure of Substantial Shareholding as Approved by the Legislative Yuan
To fully and timely disclose any significant changes in a company's shareholding structure, and strengthen the legal compliance of the securities firms and institutions, the Legislative Yuan approved the amendments to certain provisions of the Securities and Exchange Act (“SEA”) on April 21, 2023 (“Amendments”). The key points of the Amendments are as follows:
1. The threshold for the report and disclosure of substantial shareholding has been lowered to 5%
The pre-amended Paragraph 1, Article 43-1 of the SEA stipulates that any person who acquires, either individually or jointly with other persons, more than 10% of the total issued shares of a public company shall report such acquisition to the competent authority and make a public announcement; the same applies for any change in the specifics reported. The Amendments lowered the aforesaid report and disclosure threshold to 5%. For the stakeholders to take corresponding measures to comply with said new rules, the new threshold will take effect one year after the announcement by the President.
2. The fine for the securities institutions’ non-compliance has been increased to the range from NT$300,000 to NT$6 million.
According to pre-amended Article 178-1 of the SEA, an administrative fine ranging from NT$240,000 to NT$4.8 million shall be imposed for non-compliances of the securities firms, securities dealer associations, Taiwan Stock Exchange, Taipei Exchange, and other securities-related service providers. To strengthen their legal compliance and ensure that the penalties have a dissuasive effect, the Amendments raise the amount of the fine to the range from NT$300,000 to NT$6 million.
The Amendments are noteworthy as they will cause a significant impact on both the investors and the securities institutions. Lee and Li's “Corporate and Investment” practice group offers planning and consultation services on corporate governance, legal matters regarding business operations, and legal compliance. If you have any questions on the Amendments, please do not hesitate to contact us at any time.