萬國法律事務所

Len-Yu Liu, Director of the Taiwan Stock Exchange, pointed out yesterday that Taiwan’s Securities and Exchange Act (SEA), which only regulates domestic enterprises, is no longer fit to adequately respond to financial supervisory issues arising from the increasing number of listings by foreign multinationals in Taiwan. The draft amendments proposed by Taiwan Financial Supervisory Commission to revise certain sections of the SEA is being reviewed by the Legislative Yuan. Among the proposed amendments, the redefinition of the term “issuer” will serve a pivotal role in revamping the administration of international listing.

Currently, Article 4 of the SEA limits the scope of the SEA’s application to enterprises registered in Taiwan. The SEA therefore has no power over listed foreign multinationals. Where Taiwan is now open to listing by foreign multinationals, such limitation is clearly antiquated and detrimental to the internationalization of Taiwan’s capital market and, as such, will be deleted in the draft amendments. Further, the definition of the term “issuer” in Article 5 of the SEA will also be revised along the principle that “as long as a person publicly offers and issues securities, then such person is an issuer whether it is a juridical or a natural person and whether domestic or foreign”.

Len-Yu Liu indicated that this would be a fundamental revision of the SEA with the aim to modify the underlying rules-based spirit of the SEA to a principles-based approach in line with the current trend of the global financial supervisory reform.