2017-10-09

Chairmen of Banks and Financial Holding Companies Prohibited from becoming Decision Makers at Other Companies and Whistle Blower Protection

Due to recent corruption cases in the financial industry, Taiwan’s Financial Supervisory Commission (FSC) has reviewed relevant administrative regulations and discovered a loop hole for qualifications of the Chairmen of the Boards of Directors (“Chairmen”) and General Managers of financial holding companies. Currently, Chairmen and General Managers at financial holding companies are forbidden to be and/or become Chairmen and/or General Managers of non-financial companies.

However, the current regulations do not forbid said Chairmen and General Managers from holding other positions with similar controlling powers in non-financial companies. In order to enhance the concept of separation of financial industries from other companies, FSC announced an amendment to the Regulations Governing Qualification Requirements for Promoters and Responsible Persons of Financial Holding Companies and Concurrent Serving Restrictions and Matters for Compliance by Responsible Persons of Financial Holding Companies (金融控股公司發起人負責人應具備資格條件負責人兼職限制及應遵行事項準則). This new amendment will prohibit Chairmen and General Managers from holding other positions with similar controlling powers in non-financial companies and is expected to become effective by December 2017.

The Agency Against Corruption (AAC) under the Ministry of Justice recently completed a draft of the Whistle Blower Protection Act (WBPA) in September 2017. The WBPA will be submitted to the Legislative Yuan for review and deliberation in late October. To encourage whistle blowing, the newly drafted WBPA provides not only for confidentiality of the identity of the whistle blower, but, also a writ of habeas corpus and protection against unjustified degradation.

Furthermore, the protection is not limited to the whistle blower him/her-self, but, extends to the whistle blowers’ spouse, direct blood relatives, and other persons with close relationships to the whistle blower. With enactment of the WBPA, the AAC expects more persons with sensitive information to come forward with the same.
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