萬國法律事務所

According to regulations newly-amended in December 2019, the Financial Supervisory Commission (FSC; 金融監督管理委員會) has required financial holding companies to report their major shareholders by July 2020 and to establish mechanisms for verifying the backgrounds of the major shareholders and the variations of shareholdings. Violators who fail to respond accordingly will be subjected to an administrative fine starting from July 2020.

 Pursuant to paragraphs 2 and 3 of Article 25 of the Banking Act (銀行法), a person who singly, jointly, or collectively acquires more than five percent (5%) of a bank's outstanding voting shares must report such fact to the FCS within ten (10) days from the day of the acquisition resulting in such voting share percentage; a person who intends to acquire more than ten percent (10%) of a Bank's outstanding voting shares is also required to apply for prior FSC approval before moving ahead with such acquisition.

In addition, when the person is a juristic person, per paragraph 2 of Article 2 of the Instructions for Reporting Voting Shares in Accordance with Paragraph 2, Article 25 of Banking Act (銀行法第二十五條第二項持有已發行有表決權股份申報應注意事項), which were amended on December 25, 2019 and which will become effective from July 1, 2020, an individual who meets any condition stipulated in this paragraph (i.e., an individual who holds direct or indirect ownership of over 25% of the juristic person’s shares) shall also be included in the report aforesaid.

However, the FSC found that some financial holding companies have not duly requested their major shareholders to make the disclosure of necessary information or have not established mechanisms to verify the information that major shareholders provide or the variation of major shareholders’ shareholdings.  Those failures could hinder the FSC from identifying the beneficial ownerships of those financial holding companies.
 
The FSC has thus required financial holding companies to improve this situation by July 2020.  In the event that a financial holding company violates paragraphs 2 or 3 of Article 25 of the Banking Act by failing to report to the FSC with respect to the shareholdings or failing to acquire the approval for the same, the financial holding company might be subjected to an administrative fine in an amount of not less than NT$ 2,000,000 and not more than NT$ 10,000,000.