A securities firm that has appointed two or more independent directors in accordance with the articles of incorporation shall keep the number of its independent directors not less than one fifth of number of seats at the board of directors.
Independent directors shall have expertise and required knowledge, and are subject to restrictions on shareholding and outside employment. They shall maintain their independence when performing duties, and shall not have any direct or indirect interest in the company.
To elect independent directors, a securities firm shall adopt the candidate nomination system in accordance with Article 192-1 of the Company Act. The articles of incorporation shall state shareholders are to elect independent directors from the candidates on the list. Both independent directors and non-independent directors shall be elected at the same time in accordance with Article 198 of the Company Act, and the number of elected dependent directors shall be separated from the number of elected non-independent directors for purpose of election.
No independent directors of a securities firm may hold the position for more than three consecutive terms.
During their incumbency, no independent directors or non-independent directors may switch roles with each other.
If the number of independent directors becomes less than the required number under the first paragraph or the articles of incorporation after the dismissal of one or more independent directors, a reelection shall be held at the next shareholders' meeting. When all independent directors are dismissed, the company shall convene a special shareholders' meeting for reelection within 60 days of occurrence of the dismissal.
A securities firm that has appointed managing directors shall appoint at least one independent director as managing director and the independent director(s) shall account for not less than one fifth of the managing directors. The articles of incorporation shall specify the authorization of managing directors to exercise the powers of the board of directors during the recess of the board of directors. Despite of the above authorization, when there are matters involving the securities firm's major interest, the resolution of the board of directors is always required.
Professional qualifications, restrictions on shareholding and outside employment, determination of independence, method of nomination and other regulations for compliance with regard to independent director shall be governed by the Securities and Exchange Act, the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, and the regulations of Taiwan Stock Exchange or Taipei Exchange.