Chapter VII Penal Provisions |
| Article 171 | A person who commits any of the following offenses shall be punished with imprisonment for not less than three years and not more than ten years, and in addition thereto, a criminal fine of not less than NT$10 million and not more than NT$200 million may be imposed:
1. Violation of paragraph 1 or paragraph 2 of Article 20, paragraph 1 or paragraph 2 of Article 155, or paragraph 1 or 2 of Article 157-1.
2. A director, supervisor, managerial officer or employee of a company that has issued securities under this Act directly or indirectly causes the company to conduct trades that are disadvantageous and are inconsistent with regular business practice, causing substantial damage to the company.
3. A director, supervisor, or managerial officer of a company that has issued securities under this Act, with the intent to procure a benefit for themselves or for a third person, acts contrary to their duties or misappropriates company assets, thus causing damage of NT$5 million or more to the company.
If the value of property or property interests gained by the commission of an offense under the preceding paragraph is NT$100 million or more, a sentence of imprisonment for not less than seven years shall be imposed, and in addition thereto, a criminal fine of not less than NT$25 million and not more than NT$500 million may be imposed.
A person who commits an offense under paragraph 1, subparagraph 3, causing damage of less than NT$5 million to the company, shall be punished under Articles 336 and 342 of the Criminal Code.
A person who commits an offense under the preceding 3 paragraphs and subsequently voluntarily surrenders themselves, if they voluntarily hand over the proceeds of the crime in full, shall have their punishment reduced or remitted. If, in addition, another principal offender or a joint offender is captured as a result, their punishment shall be remitted.
A person who commits an offense under paragraphs 1 to 3 and confesses during the prosecutorial investigation, if they voluntarily hand over the proceeds of the crime in full, shall have their punishment reduced. If, in addition, another principal offender or a joint offender is captured as a result, their punishment shall be reduced by one-half.
Where the value of property or property interests gained by a person through the commission of an offense under paragraph 1 or 2 exceeds the maximum amount of the criminal fine, the fine may be increased within the scope of the value of the property or property interests gained; if the stability of the securities market is harmed, the punishment shall be increased by one-half.
If the proceeds of a crime committed under paragraphs 1 to 3 belong to the offender or were obtained by a natural person, juristic person, or unincorporated body other than the offender under a circumstance set out in Article 38-1, paragraph 2 of the Criminal Code, the proceeds shall be confiscated, unless they shall be returned to a victim, third person, or person who is entitled to claim for damages.
A person who violates Article 20, paragraph 1 or 2, Article 155, paragraph 1 or 2, or Article 157-1, paragraph 1 or 2, as applied mutatis mutandis under Article 165-1 or 165-2, shall be punished under the provisions of paragraph 1, subparagraph 1, and of paragraph 2 up to the preceding paragraph hereto.
The provisions of paragraph 1, subparagraphs 2 and 3, and paragraphs 2 to 7 shall apply to the directors, supervisors, managerial officers, or employees of a foreign company. |
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| Article 172 | Any director, supervisor, or employee of a stock exchange who demands, agrees to accept, or accepts any improper benefit for an act in the performance of their duties shall be punished with imprisonment for not more than five years, detention, and/or a criminal fine of not more than NT$2.4 million.
Any person referred to in the preceding paragraph who demands, agrees to accept, or accepts any improper benefits for a breach of their duties shall be punished with imprisonment for not more than seven years, and, in addition thereto, a criminal fine of not more than NT$3 million may be imposed. |
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| Article 173 | Any person who offers, promises, or delivers any improper benefit to any person under the preceding article for a breach of their duties shall be punished with imprisonment for not more than three years, detention, and/or a criminal fine of not more than NT$1.8 million.
The punishment for an offense under the preceding paragraph may be remitted if the offender voluntarily surrenders themselves. |
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| Article 174 | A person who commits any of the following offenses shall be punished with imprisonment for not less than one year and not more than seven years, and in addition thereto, a criminal fine of not more than NT$20 million may be imposed:
1. Making of false statements on the application materials required under Article 30, Article 44, paragraphs 1 to 3, or Article 93, or Article 30 as applied mutatis mutandis under Article 165-1 or 165-2, of this Act.
2. Making and dissemination to the public of false information with regard to the market value of securities or important matters relating to approval of subscription or offering.
3. The violation of paragraph 1 of Article 32 by an issuer, its responsible personnel or employees, in instances where no applicable exemption from liability is established pursuant to paragraph 2 of the same Article.
4. Any false statement in the content of any account book, form/statement, document, or other reference or report material an issuer or public tender offeror or related party thereof, a securities firm or its principals, securities association, stock exchange, or an enterprise referred to in Article 18, is required to provide pursuant to an order of the Competent Authority.
5. Any false statement in the content of any account book, form/statement, voucher, financial report, or other business document of any issuer, public tender offeror, securities firm, securities association, stock exchange, or an enterprise referred to in Article 18, required by law or by an order issued by the Competent Authority pursuant to law.
6. Any false statement in the content of a financial report under the preceding subparagraph by a managerial officer or accounting officer who signs or seals the financial report. However, the punishment may be reduced or remitted if the person has submitted a corrective opinion and provided evidence in a report to the Competent Authority before any other person has brought a complaint or the Competent Authority or a judicial agency has commenced an investigation.
7. With respect to an issuer or to trading in any specific securities, based on false information, making investment judgments, and expressing them by means of newspaper, written material, broadcast, film or other means.
8. Any director, managerial officer, or employee of an issuer who, in violation of laws or regulations, the articles of incorporation, or by acting beyond the scope of authority granted by the board of directors, loans company funds to a third party or uses company assets to provide security, a guarantee, or endorsement of a negotiable instrument for a third party, thereby causing substantial harm to the company.
9. Counterfeiting, altering, destroying, concealing, or obscuring working papers or relevant records or documents with the intent to impede inspection by the Competent Authority or investigation by a judicial agency.
A person who commits any of the following offenses shall be punished with imprisonment for not more than five years, and a criminal fine of not more than NT$15 million may be imposed or additionally imposed:
1. Issuance by a lawyer of a false or untrue opinion regarding any contract, report, or document of a company or a foreign company relating to the public offering, issuance, or trading of securities.
2. A certified public account, with respect to any material falsehood or error in a financial report, document, or information reported or published by a company or foreign company, failing to fulfill their audit duties and issuing a false report or opinion; or a CPA, with respect to a material falsehood or error in a financial report of company or a foreign company, failing to perform auditing in accordance with applicable laws and regulations and generally accepted audit principles, resulting in the failure to point out the material falsehood or error.
3. Violation of Article 22, paragraphs 1 to 3.
If the commission of an offense under the preceding paragraph severely affects the rights or interests of shareholders or harms the stability of the securities market, the punishment may be increased by one-half.
If a personnel member or employee of an issuer commits an offense in subparagraph 6 of paragraph 1, and the offense is minor, the punishment may be reduced.
The Competent Authority shall render a disposition suspending attestation work by a CPA who violates subparagraph 2 of paragraph 2.
If a foreign company is an issuer, any violation of paragraph 1, subparagraphs 2 to 9 by the foreign company or a director, managerial officer, employee, or accounting officer of the foreign company shall be punished under paragraphs 1 and 4.
A person who violates Article 22 as applied mutatis mutandis under Article 165-1 or 165-2 shall be punished under paragraphs 2 and 3. |
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| Article 174-1 | If a director, supervisor, managerial officer, or employee of a company that has issued securities under this Act commits a gratuitous act as set forth in Article 171, paragraph 1, subparagraphs 2 or 3 or set forth in paragraph 1, subparagraph 8 of the preceding Article, prejudicial to the rights of the issuer, the issuer may move for a court to void the act.
If, at the time of the commission of a non-gratuitous act by a director, supervisor, managerial officer, or employee of a company under the preceding paragraph, such person knew the act to be prejudicial to the rights and interests of the issuer and the beneficiary of the act also knew of that circumstance at the time of receiving the benefit, the issuer may move for a court to void the act.
When a motion is made to a court for voidance pursuant to either of the two preceding paragraphs, a motion may also be made for the court to order the beneficiary of the act or a party to whom any benefit was transferred to restore the status quo ante. However, this shall not apply if the party to whom the benefit was transferred was unaware of a cause for voidance at the time of the transfer.
Any disposition of property between a director, supervisor, managerial officer, or employee under paragraph 1 and such a person's spouse, lineal relative, cohabiting relative, head of household, or family member shall be deemed a gratuitous act.
Any disposition of property between a director, supervisor, managerial officer, or employee under paragraph 1 and any person other than those set forth in the preceding paragraph shall be presumed to be a gratuitous act.
The right to voidance under paragraphs 1 and 2 shall be extinguished if not exercised within one year from the time the company learns there is cause for voidance or once ten years has passed from the time of the act.
The provisions of the preceding 6 paragraphs shall apply to the directors, supervisors, managerial officers, or employees of a foreign company. |
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| Article 174-2 | (Deleted) |
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| Article 174-3 | A person who endangers, through the employment of theft, damage, or other illegal means, the normal operation of equipment functions of a core information and communication system of a stock exchange, an over-the-counter securities exchange, or a centralized securities depository enterprise shall be sentenced to imprisonment for not less than one year and not more than seven years; in addition thereto, a criminal fine of not more than NT$10 million may be imposed.
A person who intends to endanger national security or social stability and commits an offense under the preceding paragraph shall be sentenced to imprisonment for not less than three years and not more than ten years; in addition thereto, a criminal fine of not more than NT$50 million may be imposed.
If an offense under either of the preceding two paragraphs harms the stability of the securities market, the punishment shall be increased by one-half.
An attempt to commit an offense specified in paragraph 1 or paragraph 2 is punishable. |
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| Article 174-4 | A person who endangers the normal operation of equipment functions of a core information and communication system of a stock exchange, an over-the-counter securities exchange, or a centralized securities depository enterprise by any of the following means shall be sentenced to imprisonment for not less than one year and not more than seven years; in addition thereto, a criminal fine of not more than NT$10 million may be imposed:
1. Without cause, gains access to its computer or related equipment by entering its account password, cracking the protective measures for using the computer, or exploiting any vulnerability of the computer system.
2. Without cause, interferes, through the use of computer programs or other electromagnetic methods, with its computer or related equipment.
3. Without cause, obtains, deletes, or alters any magnetic record of its computer or related equipment.
A person who makes computer programs specifically for himself or another to commit any offense specified in the preceding paragraph is also subject to the penalty provisions thereof.
A person who intends to endanger national security or social stability and commits any offense under the preceding two paragraphs shall be sentenced to imprisonment for not less than three years and not more than ten years; in addition thereto, a criminal fine of not more than NT$50 million may be imposed.
If an offense under any of the preceding three paragraphs harms the stability of the securities market, the punishment shall be increased by one-half.
An attempt to commit an offense specified in paragraphs 1 to 3 is punishable. |
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| Article 175 | A person who violates the provisions of paragraph 1 of Article 18, paragraph 1 of Article 28-2, paragraph 1 of Article 43, paragraph 3 of Article 43-1, paragraph 2 or 3 of Article 43-5, paragraph 1 of Article 43-6, paragraphs 1 through 3 of Article 44, paragraph 1 of Article 60, paragraph 1 of Article 62, Article 93, Articles 96 through 98, Article 116, Article 120, or Article 160 shall be punished with imprisonment for not more than two years, detention, and/or a criminal fine of not more than NT$1.8 million.
A person who violates Article 43, paragraph 1, Article 43-1, paragraph 3, Article 43-5, paragraph 2 or 3, as applied mutatis mutandis under Articles 165-1 or 165-2, or violates Article 28-2, paragraph 1 or Article 43-6, paragraph 1, as applied mutatis mutandis under Article 165-1, shall be punished under the preceding paragraph.
A person who conducts a public tender offer without prior public announcement in violation of Article 43-1, paragraph 2, or who conducts a public tender offer without prior public announcement in violation of Article 43-1, paragraph 2 as applied mutatis mutandis under Article 165-1 or 165-2, shall be punished under paragraph 1. |
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| Article 176 | (Deleted) |
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| Article 177 | A person who violates Article 34, Article 40, Article 43-8, paragraph 1, Article 45, Article 46, Article 50, paragraph 2, Article 119, Article 150, or Article 165 shall be punished with imprisonment for not more than one year, detention, and/or a criminal fine of not more than NT$1.2 million.
A person who violates Article 40 or 150 as applied mutatis mutandis under Article 165-1 or 165-2, or Article 43-8, paragraph 1 as applied mutatis mutandis under Article 165-1, shall be punished under the preceding paragraph. |
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| Article 177-1 | A securities firm that violates the provisions of Article 74 or Article 84 shall be fined an administrative fine of an amount not greater than the price of the acquired securities. However, the fine imposed shall not be less than NT$240,000. |
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| Article 178 | A person who commits any of the following violations shall be fined an administrative fine of not less than NT$240,000 and not more than NT$4.8 million, and the person may be ordered to correct the violation within a prescribed period. If the person fails to make the correction within the prescribed period, consecutive fines may be imposed:
1. Violation of the provisions of Article 22-2, paragraph 1 or 2, Article 26-1, or Article 22-2, paragraph 1 or 2 as applied mutatis mutandis under Article 165-1.
2. Violation of the provisions of Article 14, paragraph 3, Article 14-1, paragraph 1 or 3, Article 14-2, paragraph 1, 3, or 6, Article 14-3, Article 14-5, paragraphs 1 to 3, Article 21-1, paragraph 5, Article 25, paragraph 1, 2, or 4, Article 31, paragraph 1, Article 36, paragraph 5 or 7, Article 41, Article 43-1, paragraph 1, Article 43-4, paragraph 1, or Article 43-6, paragraphs 5 to 7; or Article 14, paragraph 3, Article 31, paragraph 1, Article 36, paragraph 5, or Article 43-4, paragraph 1 as applied mutatis mutandis under Article 165-1 or 165-2; or Article 14-1, paragraph 1 or 3, Article 14-2, paragraph 1, 3 or 6, Article 14-3, Article 14-5, paragraphs 1 to 3, Article 25, paragraph 1, 2, or 4, Article 36, paragraph 7, Article 41, Article 43-1, paragraph 1, Article 43-6, paragraphs 5 to 7, as applied mutatis mutandis under Article 165-1.
3. An issuer or public tender offeror or a related party thereof or a principal of a securities firm fails to submit account books, forms/statements, documents, or other reference or report materials within the required time period as ordered by the Competent Authority, or evades, impedes, or refuses an examination conducted by the Competent Authority.
4. If any issuer or public tender offeror fails to comply with relevant regulations with respect to the preparation, submission, public announcement, provision, or preservation of the account books, forms/statements, vouchers, financial reports or other relevant business documents as required by this Act or by orders issued by the Competent Authority pursuant to this Act.
5. Violation of Article 14-4, paragraph 1 or 2, or of Article 14-4, paragraph 1 or 2 as applied mutatis mutandis under Article 165-1; or violation of the provisions of the regulations adopted pursuant to Article 14-4 paragraph 5, or adopted pursuant to that paragraph as applied mutatis mutandis under Article 165-1, governing procedures, exercise of powers, or matters to be recorded in the meeting minutes.
6. Violation of the forepart of Article 14-6, paragraph 1, or of the forepart of that paragraph as applied mutatis mutandis under Article 165-1, by failing to establish a remuneration committee; or violation of the provisions of the regulations adopted pursuant to the latter part of Article 14-6 paragraph 1, or adopted pursuant to the latter part of that paragraph as applied mutatis mutandis under Article 165-1, governing the qualifications for the members of the committee, its composition, procedures, exercise of powers, matters to be recorded in the meeting minutes, or public announcement and filing.
7. Violation of the provisions of the regulations adopted pursuant to Article 25-1, or adopted pursuant to that article as applied mutatis mutandis under Article 165-1, governing the qualifications of proxy solicitors, proxy agents, or those handling proxy solicitation matters, the methods of solicitation or acquisition of proxy forms, corporate compliance matters in connection with the convening of shareholders meetings, or refusal to comply with a request by the Competent Authority for provision of information.
8. Violation of the shareholding percentage requirements of directors and supervisors of public companies prescribed by the Competent Authority in accordance with paragraph 2 of Article 26, or of provisions regarding notifications and auditing in the rules for auditing of the shareholdings thereof.
9. Violation of the provisions of Article 26-3, paragraph 1 or 7, or the forepart of paragraph 8; or violation of the provisions of Article 26-3, paragraph 1 or 7, or the forepart of paragraph 8 as applied mutatis mutandis under Article 165-1; or violation of the provisions of the regulations adopted pursuant to the latter part of paragraph 8 of Article 26-3, or adopted pursuant to the latter part of that paragraph as applied mutatis mutandis under Article 165-1, regarding the content of deliberations, procedures, matters to be recorded in the meeting minutes, or public announcement.
10. Violation of the provisions of Article 28-2, paragraphs 2 or 4 to 7, or of Article 28-2, paragraphs 2 or 4 to 7 as applied mutatis mutandis under 165-1; or violation of the provisions of the regulations adopted pursuant to Article 28-2, paragraph 3, or adopted pursuant to that paragraph as applied mutatis mutandis under Article 165-1, regarding share buyback procedures, prices, volumes, methods, methods of transfer, or matters that must be filed and publicly announced.
11. Violation of the provisions of the regulations adopted pursuant to Article 36-1, or adopted pursuant to that article as applied mutatis mutandis under Article 165-1, regarding the scope, working procedures, required public announcements, or required filings for financial or operational actions of material significance, such as the acquisition or disposal of assets, engaging in derivatives trading, monetary loans to others, endorsements or guarantees for others, or disclosure of financial forecasts.
12. Violation of the provisions of Article 43-2, paragraph 1, Article 43-3, paragraph 1, or Article 43-5, paragraph 1; or of Article 43-2, paragraph 1, Article 43-3, paragraph 1, or Article 43-5, paragraph 1, as applied mutatis mutandis under Article 165-1 or Article 165-2; or violation of the regulations adopted pursuant to Article 43-1, paragraphs 4 or 5, or adopted pursuant to Article 43-1, paragraph 4 as applied mutatis mutandis under Article 165-1 or Article 165-2, regarding the scope, conditions, period, related parties, or particulars for filing and public announcement in connection with purchases of securities.
When a foreign company is an issuer, any violation of subparagraph 3 or 4 of the preceding paragraph by the foreign company shall be punished under the preceding paragraph.
If a violation subject to a penalty of an administrative fine under the preceding two paragraphs is a minor violation, the penalty may be remitted, or the violator may first be ordered to correct the violation within a prescribed time period, and the penalty may be remitted once the violation has been corrected.
A reward shall be given for a report of a violation of Article 25-1 that leads to the discovery of a violation. Regulations governing such reward shall be prescribed by the Competent Authority. |
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| Article 178-1 | If a securities firm, an enterprise as set forth in Article 18, paragraph 1, a securities association, a stock exchange, or an over-the-counter securities exchange commits any of the following violations, the violating entity or association may be fined an administrative fine of not less than NT$300,000 and not more than NT$6 million, and the Competent Authority may order it to correct the violation within a prescribed time period; if it fails to correct the violation within the specified period, consecutive fines may be imposed for each instance of violation:
1. Violation of Article 14, paragraph 3, Article 14-1, paragraph 1 or 3, Article 21-1, paragraph 5, Article 58, Article 61, Article 69, paragraph 1, Article 79, Article 141, Article 144, Article 145, paragraph 2, Article 147, Article 152, or Article 159; or Article 61, Article 141, Article 144, Article 145, paragraph 2, or Article 147 as applied mutatis mutandis under Article 165-1 or 165-2.
2. Failure to submit account books, forms/statements, documents, or other reference or report materials within a specified time period as ordered by the Competent Authority or evading, impeding, or refusing of an examination duly conducted by the Competent Authority.
3. Failure to comply with relevant provisions regarding the preparation, submission, public announcement, maintenance, or preservation of account books, forms/statements, vouchers, financial reports, or other relevant business documents as required by this Act or by orders issued by the Competent Authority pursuant to this Act.
4. A securities firm or an enterprise, as set forth in Article 18, paragraph 1, fails to strictly implement its internal control system.
5. An enterprise, as set forth in Article 18, paragraph 1, violates the provisions of the regulations adopted pursuant to paragraph 2 of the same article regarding finances, operation, or management.
6. A securities firm violates the provisions of the regulations adopted pursuant to Article 22, paragraph 4 regarding the issuance of other securities approved by the Competent Authority or the provisions of the standards or regulations adopted pursuant to Article 44, paragraph 4, the regulations adopted pursuant to Article 60, paragraph 2, the regulations adopted pursuant to Article 62, paragraph 2, or the regulations adopted pursuant to Article 70 regarding finances, operations, or management.
7. An over-the-counter securities exchange violates provisions of the regulations adopted pursuant to Article 62, paragraph 2, a securities association violates provisions of the regulations adopted pursuant to Article 90, or a stock exchange violates provisions of regulations adopted pursuant to Article 93, Article 95, or Article 102, regarding finances, operations, or management.
If a violation subject to a penalty of an administrative fine under the preceding paragraph is minor, the penalty may be remitted, or the violator may first be ordered to correct the violation within a prescribed time period, and the penalty may be remitted once the violation has been corrected. |
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| Article 179 | Except as provided in Article 177-1 and the preceding article, if a juristic person or a foreign company violates the provisions of this Act, the individual person(s) responsible for the act will be punished under the articles of this chapter. |
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| Article 180 | (Deleted) |
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| Article 180-1 | If a criminal fine assessed for an offense under this Chapter is NT$50 million or more, and the offender cannot pay it in full, it shall be commuted to labor for a period of not more than two years, to be calculated by the ratio of the total amount of the fine to the number of days in two years. If the fine assessed is NT$100 million or more and the offender lacks the ability to pay it in full, it shall be commuted to labor for a period of not more than three years, to be calculated by the ratio of the total amount of the fine to the number of days in three years. |
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