On May 10, 2023, the Securities and Exchange Act (SEA) was amended to reduce the report criteria of the percentage of shares held by shareholders in a public company, individually or collectively, from 10% to 5%, effective one year after the announcement of the amendment (i.e., to be implemented on
On May 10, 2023, the Securities andExchange Act (SEA) was amended to reduce the report criteria of the percentageof shares held by shareholders in a public company, individually orcollectively, from 10% to 5%, effective one year after the announcement of theamendment (i.e., to be implemented on May 10, 2024). In the future, if aninvestor acquires more than 5% of the shares of a public company, he/she isrequired to report the information to the competent authorities.
In response to this, the FSC stated ina press release that the purpose of this amendment is to ensure thatinformation on significant changes in a company's shareholding can be disclosedimmediately and adequately, so that investors and the competent authorities canbe aware of the reasons for and the trend of large-scale changes in a company'sshareholding. Consequently, this will enhance the understanding of the possiblechanges in a company's management and share price. In addition, with referenceto the fact that many countries, such as the U.S. and Japan, have adopted 5% asthe threshold for reporting substantial shareholdings and that since the firstquarter of 2020, financial reports of Taiwan's listed companies have beenrequired to disclose information on shareholders holding 5% or more of the company'sshares. Accordingly, in order to improve the system for disclosure ofsubstantial shareholdings, enhance the transparency of information, conform tothe trend of foreign legislation, and enhance the standards of Taiwan'scorporate governance, the threshold for reporting and announcing substantialshareholdings has been lowered from 10% to 5%. Considering the formulation andamendment of the accompanying laws and regulations, as well as the adjustmentsto be made by public companies in their business operations in response to thisamendment, a one-year buffer period is provided, under which the amendment tolower the threshold of shareholding will be effective one year after the dateof the announcement (Article 43-1 of the amended Securities and Exchange Act).
Reference: FSC press release
