• Font Size：
  • S
  • M
  • L

Amendments

Title：

Securities and Exchange Act  CH

Amended Date： 2024.08.07 
Article Content Chapter Content Search Article No. Search Subordinate Legislation Amended Article Legislative History Chinese

Title： Securities and Exchange Act(2023.06.28)
Date：
Article 14-4 (Appointment of Audit Committee or Supervisors)
    A company that has issued stock in accordance with this Act shall establish either an audit committee or a supervisor. However, a company that falls within the conditions set by the Competent Authority based on company scale, type of operations, or other essential considerations shall establish an audit committee in lieu of a supervisor.
    The audit committee shall be composed of the entire number of independent directors. It shall not be fewer than three persons in number, one of whom shall be convener, and at least one of whom shall have accounting or financial expertise.
    For a company that has established an audit committee, the provisions regarding supervisors in this Act, the Company Act, and other laws and regulations shall apply mutatis mutandis to the audit committee.
    The following provisions of the Company Act shall apply mutatis mutandis with regard to independent directors who are members of the audit committee: Article 200; Article 216, paragraphs 1, 3, and 4; Article 218, paragraphs 1 and 2; Article 218-1; Article 218-2, paragraph 2; Articles 224 - 226; and Article 245, paragraph 2. The provisions of Article 214, Article 215, and the proviso of Article 227 of the Company Act shall apply mutatis mutandis with regard to litigation brought against independent directors.
    Regulations governing the exercise by the audit committee and its independent director members of the powers set out in the preceding two paragraphs, and the operation procedures, matters to be recorded in the meeting minutes, and other matters related thereto, shall be prescribed by the Competent Authority.
    A resolution of the audit committee shall have the concurrence of one-half or more of all members.
Article 14-5 (Company Matters Requiring Consent of the Audit Committee)
    For a company that has issued stock in accordance with this Act and established an audit committee, the provisions of Article 14-3 shall not apply to the following matters, which shall be subject to the consent of one-half or more of all audit committee members and be submitted to the board of directors for a resolution:
  1. Adoption or amendment of an internal control system pursuant to Article 14-1.
  2. Assessment of the effectiveness of the internal control system.
  3. Adoption or amendment, pursuant to Article 36-1, of handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, or endorsements or guarantees for others.
  4. A matter bearing on the personal interest of a director.
  5. A material asset or derivatives transaction.
  6. A material monetary loan, endorsement, or provision of guarantee.
  7. The offering, issuance, or private placement of any equity-type securities.
  8. The hiring or dismissal of an attesting CPA, or the compensation given thereto.
  9. The appointment or discharge of a financial, accounting, or internal auditing officer.
  10. Annual financial reports and second quarter financial reports that must be audited and attested by a CPA, which are signed or sealed by the chairperson, managerial officer, and accounting officer.
  11. Any other material matter so required by the company or the Competent Authority.
    With the exception of subparagraph 10, any matter under a subparagraph of the preceding paragraph that has not been approved with the consent of one-half or more of all audit committee members may be undertaken upon the consent of two-thirds or more of all directors, without regard to the restrictions of the preceding paragraph, and the resolution of the audit committee shall be recorded in the minutes of the directors meeting.
    If for good cause it is impossible to hold a meeting of the audit committee, the matters in the subparagraphs of paragraph 1 shall be adopted with the consent of two-thirds or more of all directors. However, the matters in paragraph 1, subparagraph 10 shall still require the opinion of the independent directors indicating their consent.
    A company that has established an audit committee is not subject to the provisions of Article 36-1 requiring that its financial reports be recognized by a supervisor.
    "All audit committee members" and "all directors" as used in paragraph 1 to paragraph 3 and the preceding article shall mean the actual number of persons currently holding those positions.
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 securities central 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.
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 securities central 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 paragraph 1 to paragraph 3 is punishable.
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, 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 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.
Article 181-2 (Time of Application)
    A requirement by the Competent Authority for the establishment of independent directors pursuant to the proviso of Article 14-2, paragraph 1, the establishment of an audit committee pursuant to the proviso of Article 14-4, paragraph 1, or the ipso facto dismissal of a director or supervisor pursuant to Article 26-3, paragraph 6 during the enforcement of Article 26-3 may be applied from the time of expiration of the term currently being served by the directors or supervisors.