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Chapter Content

Title:

Securities and Exchange Act  CH

Amended Date: 2021.01.27 
   Chapter VII Penal Provisions
Article 171(Penal Provisions)
    A person who has committed 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 fine of not less than NT$10 million and not more than NT$200 million may be imposed:
  1. A person who has violated the provisions 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 an issuer under this Act who, directly or indirectly, causes the company to conduct transactions to its disadvantage and not in the normal course of operation, thus causing substantial damage to the company.
  3. A director, supervisor, or managerial officer of an issuer under this Act who, with intent to procure a benefit for himself/herself or for a third person, acts contrary to his/her duties or misappropriates company assets, thus causing damage of NT$5 million or more to the company.
    Where 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 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 himself/herself, if he/she voluntarily hands over the proceeds of the crime in full, shall have his/her punishment reduced or remitted. Where another principal offender or an accomplice is captured as a result, the punishment shall be remitted.
    A person who commits an offense under paragraphs 1 to 3 and confesses during the prosecutorial investigation, if he/she voluntarily hands over the proceeds of the crime in full, shall have his/her punishment reduced. Where another principal offender or an accomplice is captured as a result, the punishment shall be reduced by one-half.
    Where the value of property or property interests gained by a person through 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 to the preceding paragraph.
    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(Penal Provisions)
    Any director, supervisor, or employee of a stock exchange who demands, agrees to accept or accepts any improper benefit in connection with the performance of his/her duties shall be punished with imprisonment for not more than five years, detention, and/or a 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 actions in breach of his/her duties shall be punished with imprisonment for not more than seven years and in addition thereto a fine of not more than NT$3 million may be imposed.
Article 173(Penal Provisions)
    Any person who promises to offer, agrees to offer, or delivers any improper benefits to any person who acts contrary to his/her duty as specified in the preceding Article shall be punished with imprisonment for not more than three years, detention, and/or a fine of not more than NT$1.8 million.
    The punishment of the offense specified in the preceding paragraph may be pardoned if the offender voluntarily surrenders himself/herself to law enforcement authorities.
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Article 174(Penal Provisions)
    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 fine of not more than NT$20 million may be imposed:
  1. the 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. the making and dissemination to the public of false information with regard to the market value of securities, or with regard to the material aspects of the approved public offering.
  3. the violation of paragraph 1 of Article 32 by an issuer, its responsible persons or employees, and the provision of paragraph 2 of the same Article does not apply.
  4. the making of false statements on the account books, forms/statements, documents, or other reference or report materials produced by any issuer or public tender offeror or related party thereof, securities firm or its principals, securities dealers association, stock exchange, or any other enterprises referred to in Article 18 pursuant to an order of the Competent Authority to produce such materials.
  5. the making of false statements on the account books, forms/statements, vouchers, financial reports or any other business documents by any issuer, public tender offeror, securities firm, securities dealers association, stock exchange, or any other enterprises referred to in Article 18, as required to be produced in compliance with acts or regulations, or orders prescribed by the Competent Authority pursuant thereto.
  6. the making of false statements 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; provided, 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 the Competent Authority or a judicial agency has commenced an investigation [ex officio or] upon a complaint filed by another person.
  7. the making of any investment advice relating to an issuer or specific securities transactions which was based on false information and disseminating the said advice on any newspapers and magazines, written materials, broadcasts, films or by other means.
  8. the loaning of company funds to another person, using company assets to provide security or a guarantee for another person, or endorsing of a negotiable instrument by a director, managerial officer, or employee of an issuer in violation of an act or regulation, or the articles of incorporation, or beyond the scope authorized by the board of directors, causing substantial damage to the company.
  9. counterfeiting, altering, destroying, concealing, or obscuring working papers or relevant records or documents with 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, or a fine of not more than NT$15 million may be imposed [in lieu thereof] or in addition thereto:
  1. issuance of a false or untrue opinion by a lawyer regarding any contract, report, or document of the company or foreign company related to securities offering, issuance, or trading.
  2. failure by a certified public account to faithfully fulfill his or her audit duties and issue a report or opinion with respect to any material falsehood or error in a financial report, document, or information reported or published by a company or foreign company; or failure by a certified public accountant to expressly state a material falsehood or error in a company or foreign company financial report due to failure to audit in accordance with applicable laws and regulations and generally accepted audit principles.
  3. violation of Article 22, paragraphs 1 to 3.
    Where the commission of an offense under the preceding paragraph materially affects the rights or interests of shareholders or harms the stability of the securities market, the punishment may be increased by one-half.
    Where 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 certified public accountant who violates subparagraph 2 of paragraph 2.
    If a foreign company is the issuer, any violation of paragraph 1, subparagraphs 1 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(Penal Provisions)
    When a director, supervisor, managerial officer, or employee of a company with securities issued pursuant to this Act commits a gratuitous act as set forth in Article 171, paragraph 1, subparagraphs 2 or 3 or paragraph 1, subparagraph 8 of the preceding Article prejudicial to the rights and interests of the issuer, the issuer may petition a court for voidance of the act.
    If, at the time of commission of a non-gratuitous act by a director, supervisor, managerial officer, or employee of a company as referred to in the preceding paragraph, such person knew the act to be prejudicial to the rights and interests of the issuer, where the beneficiary of the act also knew of that circumstance at the time of receiving the benefits, the issuer may petition a court for voidance of the act.
    When an application is made to a court for voidance pursuant to either of the two preceding paragraphs, the court may also be petitioned to order the beneficiary of the act or a party to whom benefits were transferred to restore the status quo ante, provided that this shall not apply where the party to whom the benefit was transferred was not aware of a cause for voidance at the time of the transfer.
    Any disposition of property between a director, supervisor, managerial officer, or employee as referred to in 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 as referred to in 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 after the time the company learns there is cause for voidance, or ten years after 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 175(Penal Provisions)
    A person who violates the provisions of paragraph 1 of Article 18, A paragraph 1 of Article 28-2, paragraph 1 of Article 43, paragraph 3 of Article 43-1, paragraphs 2 and 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 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, paragraphs 2 and 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)
Article 177(Penal Provisions)
    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 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(Penal Provisions)
    A securities firm that violates the provisions of Article 74 or Article 84 shall be fined an amount not greater than the purchase price of the acquired securities. However, the fine imposed shall not be less than NT$240,000.
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Article 178(Penal Provisions)
    A person who commits any of the following violations shall be punished with an administrative fine of not less than NT$240,000 and not more than NT$4.8 million, and the Competent Authority may order the person 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, paragraph 1 or 2, 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, paragraph 1 or 2, 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 time period specified in this Act or in an order issued by the Competent Authority pursuant to this Act, or any of the above parties evades, impedes, or refuses an examination carried out by the Competent Authority.
  4. If any issuer or public tender offeror fails to comply with relevant regulations in the preparation, submission, public announcement, maintenance, or storage of the account books, forms/statements, vouchers, financial reports or other relevant business documents as required by this Act, or as required 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 shareholder meetings, or refusal to comply with a requirement by the Competent Authority for provision of information.
  8. Violation of the shareholding percentage requirements of directors and supervisors of publicly issued companies prescribed by the Competent Authority in accordance with paragraph 2 of Article 26, and provisions regarding notifications and auditing in the enforcement rules for auditing the shareholdings thereto.
  9. Violation of the provisions of Article 26-3, paragraph 1, 7, or the forepart of paragraph 8, or of Article 26-3, paragraph 1, 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, governing 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, governing procedures, prices, volumes, methods, methods of transfer, or matters that must be filed and publicly announced in relation to repurchase of shares.
  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, governing 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, extension of monetary loans to others, endorsements or guarantees for others, or disclosure of financial projections.
  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 the issuer, any violation of subparagraphs 3 or 4 of the preceding paragraph by the foreign company shall be punished under the preceding paragraph.
    The penalty for a violation punishable by an administrative fine under the preceding two paragraphs may be remitted, or the violator may be ordered to correct the violation within a prescribed time period and the penalty remitted once the violation has been corrected, if the violation is minor.
    A reward shall be given for a report of a violation of Article 25-1 that leads to discovery of a violation. Regulations governing such reward shall be prescribed by the Competent Authority.
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Article 178-1(Penal Provisions)
    If a securities firm, an enterprise as set forth in Article 18, paragraph 1, a securities dealers association, a stock exchange, or an over-the-counter securities market commits any of the following violations, the violating entity or association may be punished with an administrative fine of not less than NT$240,000 and not more than NT$4.8 million, and the Competent Authority may order it to comply within a prescribed time period; if it fails to comply within the specified period, consecutive fines may be imposed:
  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 evasion, impeding, or refusal of an examination duly conducted out 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 regulations adopted pursuant to paragraph 2 of the same article, governing finances, operation, or management.
  6. A securities firm violates the provisions of the regulations adopted pursuant to Article 22, paragraph 4 governing the issuance of other securities that have received approval from 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, governing finances, operations, or management.
  7. An over-the-counter securities market violates the provisions of regulations adopted pursuant to Article 62, paragraph 2, a securities dealers association violates the provisions of regulations adopted pursuant to Article 90, or a stock exchange violates the provisions of regulations adopted pursuant to Article 93, Article 95 or Article 102, governing finances, operations, or management.
    The penalty for a violation punishable by an administrative fine under the preceding paragraph may be remitted, or the violator may be ordered to correct the violation within a prescribed time period and the penalty remitted once the violation has been corrected, if the violation is minor.
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Article 179(Person Punishable for Violation of the Act by a Juristic Person or Foreign Company)
    Except as provided in Article 177-1 and in the preceding article, if a juristic person or a foreign company violates the provisions of this Act, the individual person responsible for the act will be punished under the articles of this chapter.
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Article 180    (Deleted)
Article 180-1(Penal Provisions)
    Where a fine assessed for an offense under this Chapter is NT$50 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 two years, to be calculated by the ratio of the total amount of the fine to the number of days in two years; where 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.