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Stepping up the propagation of regulations concerning shareholding by the same person or same affiliated person among the shareholders of financial holding companies
From: The Financial Supervisory Commission
Date: 2005/12/28
Ref. No.: Jin-Kuan-Yin-(6)-Zi-No. 09460011530
Subject: To effectively implement Articles 4, 5 and 16 of the Financial Holding Company Act, please step up your propagation of relevant regulations among shareholders
Explanation:
1. Pursuant to paragraph 2, Article 16 of the Financial Holding Company Act (referred to as the “Act” hereunder), if, after a financial holding company has been established, a same person or same affiliated person who plans to acquire more than ten percent (10%) voting shares outstanding of the financial holding company shall apply to the competent authority for approval in advance, or notify such financial holding company, which shall report same to the competent authority for approval.
2. In accordance with Article 4 of the Act, “the same person” means the same natural person or same juristic person; “the same affiliated person” means the principal, his /her spouse, blood relatives within the second degree of kinship and enterprises in which the principal or his/her spouse is the responsible person; and an “affiliate" shall mean an enterprise to which Articles 369-1 through 369-3 of the Company Act apply. Pursuant to Article 5 of the Act, in calculating the number of shares of a financial holding company held by the same person or same affiliated person, shares held by the affiliate(s) of the same person or same affiliated person, shares held by a third party acting as a nominee for the same person or same affiliated person, or for the affiliate(s) o the same person or same affiliated person shall be combined.
3. If a same person or same affiliated person violates the provisions in paragraph 2, Article 16 of the Act by holding 10% or more shares of a financial holding company without the prior approval of the competent authority, the FSC may, pursuant to paragraph 6 of the same article, restrict the voting rights of shares that exceed the approved number of shares, and pursuant to Article 60 of the Act, impose a fine of not less than NT$2,000,000 and not more than NT$10,000,000. If such same person or same affiliated person is elected as a director, supervisor or responsible corporate officer of the financial holding company in the future, the FSC may consider including the violation as a dishonest or improper activity that precludes a person from serving as a responsible person of a financial holding company according to subparagraph 14, paragraph 1, Article 4 of the Regulations Governing Qualification Requirements for Responsible Persons of a Financial Holding Company and their Holding of Concurrent Positions in Subsidiaries.
4. Please step up the propagation of the aforesaid matters in the following manner:
(1) Set up an investor relations zone on your website to propagate relevant regulations, including the Fit and Proper Criteria for the Same Person or Same Affiliated Person Holding Voting Shares Exceeding a Specific Percentage, and provide related application forms for download.
(2) Include the matter as a report item in the agenda of the shareholders’ meeting held in the year before any election takes place to call to the attention of shareholders.
(3) Include the matter in the public announcement of the planned date for shareholders’ meeting or include the matter in a press release.
(4) Within 10 days after the announcement of record date for suspension of title transfer registration for convening a general shareholders’ meeting (the record date is 60 days before) or a special shareholders’ meeting (the record date is 30 days before), mail relevant regulations to shareholders holding 1% or more shares to call their attention to the matter. The FSC will ask the Taiwan Depository & Clearing Corp. to include compliance with this provision as one of the shareholders’ service audit items starting January 1, 2006.
5. The FSC will post the regulations governing holding more than 10% of shares of a financial holding company by the same person or same affiliated person and examination flow chart on the websites of the FSC and the Banking Bureau for your reference. |