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SFIPC actively strengthens the protection mechanism of investors' interests in response to the new amendments of the “Securities Investors and Futures Traders Protection Act” and the “Business Disputes Procedure Act” effective in 2021

The Securities and Futures Investors Protection Center (“SFIPC”) is an organization whose aim is to carry out the shareholder activism as its core business covering class-action litigation, derivative suit and discharge suit. As of July, 2020, the SFIPC has assisted investors in 263 class-action litigations with the claim amount up to NT$60 billion and the number of authorizers over 170,000 people. Total compensation for investors through settlements or winning cases has amounted to NT$6.5 billion. In terms of derivative suit and discharge suit, there have been 60 cases and 64 cases respectively. Compensation by those individuals or companies found guilty in a court of law or by the agreements made with the company for derivative suits is about NT$1.6 billion and there have been 19 winning cases for discharge suits up to now. These successful cases do play significant roles in the safeguard of civil liabilities, corporate governance and the protection of investors' interests and rights in our capital market. Other than lawsuits, the SFIPC had participated in 60 shareholder meetings of TWSE-listed or TPEx-listed companies in 2019 to express its views and opinions on issues that have great influence on shareholders’ interests. The SFIPC has participated in a record number of shareholder meetings in 2020 in order to actively fulfill shareholder activism.

The key amendments of the “Securities Investors and Futures Traders Protection Act” effective on August 1, 2020 include the following: The derivative suit and discharge suit have become applicable for companies listed in TPEx as emerging stocks and the foreign issuers listing in Taiwan ; the introduction of the disqualification mechanism once the dismissal of the director has been adjudicated by the courts, the person may not serve as directors for any exchange-listed, OTC-listed, or emerging stock company within three years since the date of the conviction; the derivative suit has become applicable to managerial officers and former directors or supervisors; the effect of independent intervention for derivative suits and more. These amendments enlarge the application scope for suits, reinforce the function of external surveillance more effectively and improve the corporate governance reputation in our capital market. The public expects the SFIPC to have an even stronger performance in the future and the SFIPC will actively implement the new amendments to the “Securities Investors and Futures Traders Protection Act”.

The “Business Disputes Procedure Act” will become effective on July 1, 2021. Due to the fact that the current class-action litigations, derivative suits and discharge suits initiated by the SFIPC are mainly complex or scaled commercial disputes, there is a high possibility those cases can be processed by the Business Court in the future. The Business Court is an efficient, appropriate and specialized court for the resolution of major commercial disputes. In response to this change, the SFIPC’s goal is to enhance its organizational efficacy. In addition, the SFIPC is now working on the classification and coordination of the related issues and judicial practices about on-going cases. By accumulating those related experience in different cases, the SFIPC intends to build a consistent methodology of reasoning and to augment the ability of evidence-presenting, with the hope that the Business Court will be able to resolve disputes in a prompt, appropriate and professional manner and to protect the interests of investors in a more efficient way in the future.

Update Date:2020/08/27 18:26