萬國法律事務所

Taiwan's Executive Yuan passed a proposed amendment to the Securities Investor and Futures Trader Protection Act (Act) on 9 April, 2020, which amendment will substantially change the Act. The following are brief summaries of the key points of the proposed amendment:

1. The causes for which the Securities and Futures Investors Protection Center (SFIPC) may file derivative lawsuits or discharge lawsuits against directors or supervisors are expanded from conduct of business operations to conduct of non-business operations. Per the proposed amendment, insider trading and manipulation of prices may be causes on which claims for compensation may be based.

2. In addition to the directors and supervisors of listed companies and OTC companies, directors and supervisors of emerging stock companies can be the targets of the SFIPC in derivative lawsuits or discharge lawsuits.

3. The scope of indemnifying parties in derivative lawsuits filed by the SFIPC is expanded from directors and supervisors to managers, based on the same factual grounds. Furthermore, even if directors, supervisors, or managers are no longer serving in these positions, the SFIPC may file derivative lawsuits against them.

4. The causes for filing a discharge lawsuit will no longer be limited to those arising during the current term of the relevant directors or supervisors. That is, the SFIPC may file a discharge lawsuit against directors or supervisors due to causes that arose during a past term.

5. The directors and supervisors removed by discharge lawsuits filed by the SFIPC cannot serve as directors and supervisors of listed companies, OTC companies, or emerging stock companies within three years after being removed from their positions. Likewise, such directors and supervisors will not be permitted to serve as the representatives of legal persons as corporate directors or supervisors.

6. The above provisions also apply to foreign companies as defined at §156-1 of the Securities and Exchange Act.