萬國法律事務所

On 4 September 2012, Taiwan’s Financial Supervisory Commission (FSC) declared certain revisions to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers (Regulations) which are relevant to Restricted Shares. After the revisions, the provision regarding Restricted Shares will be changed from “shares given to one employees may not be more than 10% of the total volume of each issuance” to “shares given to employees may not be more than 10% of the total issued shares ”.

Restricted Shares were for the first time adopted by the Regulations on 20 February 2012. According to the original regulations, the volume of Restricted Shares given to one single employee could not exceed 10% of the total volume of that issuance. In other words, when a company planned to issue Restricted Share, the company was required to select at least 10 employees to receive shares.

Many companies complained that this required method of issuance lacked flexibility, and further, that finding 10 employees each time was problematic.

After considering the actual needs in Taiwan and the experiences in foreign countries, the Taiwan Government decided to relax the restrictions on Restricted Shares. Under the new Regulations, there is no need to select 10 employees for receipt of the shares. So long as the number of the shares given to an employee do not exceed 10% of the total issued shares of the company, the issuance of the Restricted Shares is deemed to be legal.