Amendment to the Regulations Governing the Administration of Shareholder Services of Public Companies was promulgated on March 2, 2021. With the exception of Article 3-5, which will be effective on January 1, 2022, the remaining amended provisions are effective on the date of promulgation. The key content of the amendment is as follows:

1. Adding Paragraph 1 of Article 44-5, “The company or its shareholder services agent shall, on the day before the shareholders' meeting, compile and prepare a statistical table of the number of shares of shareholders attending the shareholders' meeting by means of electronic transmission, and publicize it on the electronic voting platform of the entity entrusted with the handling of matters relating to electronic voting,” to enhance the transparency of the electronic voting results.

2. Article 3-2, which originally provided, “When a company that is listed on the stock exchange or traded on the OTC market makes a change from outsourcing shareholder services matters to handling those matters in-house, it shall be done through the passage of a resolution by the shareholders meeting and application to and approval by the institution designated by this Commission…,” was amended to, “A company that is listed on the stock exchange or traded on the OTC market cannot change from outsourcing its shareholder services matters to handling those matters in-house.” This is to synchronize with the provision that a listed company that was listed at any time from 2 January 2013 onward shall engage a professional shareholder services agent to process shareholder services matters. The intention is to make the application and administration of the regulations governing shareholder services to be consistent, considering that it is an international trend to engage professional shareholder services agent to process shareholder services matters and that the neutrality and fairness of the shareholder services agent is critical to shareholders’ rights and interests.  

3. Paragraph 3 of Article 6 originally provided that, “if a company which handles shareholder services in-house or a shareholder services agent violates the law or the rules of their internal control system, and is issued an official reprimand or a disposition by the Financial Supervisory Commission, it may no longer handle shareholder services for itself or for the company involved in the violation.” In consideration of the fact that the handling of shareholder services is critical to shareholders’ rights and interests and that a transfer procedure is involved, the amendment adds, “the transfer of shareholder services shall be completed within two months of the delivery of the Financial Supervisory Commission’s disposition.” In addition, considering there might not be a shareholder services agent willing to undertake the task due to lack of manpower or other causes, the amendment adds, “where no shareholder services agent is willing to undertake the matters or where the Financial Supervisory Commission deems necessary, an institution appointed by the Financial Supervisory Commission will appoint a shareholder services agent to undertake such shareholder services matters.”

4. Adding Article 3-5 (effective January 1, 2022): A company that is listed on the stock exchange or traded on the OTC market and handles shareholder services matters in-house or by means of a professional shareholder services agent shall be reviewed by an institution appointed by the Financial Supervisory Commission at least once every three years. Where the review rendered disqualification and the circumstances were serious, or where the company or agent was ordered to improve but failed to do so within the designated period, for a company handling shareholder services in-house, the Financial Supervisory Commission may restrict it from handling its own shareholder services; for a professional shareholder services agent, the FSC may restrict it from undertaking new shareholder services contracts for a period no less than six months and no more than one year.

(Author: Fang-Yu Wei, Esq.)

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