Securities and Futures Investors Protection CenterSecurities and Futures Investors Protection Center

Taiwan’s securities and futures markets are dominated by individual investors who, nonetheless, are in an economically inferior position when they encounter any conflict against securities firms, futures companies, or securities issuers. Once their interests or rights are violated, they seldom pursue judicial procedures to protect themselves due to inadequate information, limited personal capability, high litigation cost, or other difficulties.

To strengthen corporate governance mechanisms and protect the rights and interests of shareholders in cases involving matters such as breaches of trust and misappropriation of company assets by company management or breach of fiduciary duty by company directors or supervisors, the Securities Investor and Futures Trader Protection Act (hereinafter, the "Act") was amended on May 20, 2009 to add Article 10-1. That article empowers the Securities and Futures Investors Protection Center (SFIPC; hereinafter, the "Center")—upon discovering any conduct on the part of a director or supervisor of a TWSE or TPEx listed company in the course of performing his or her duties that is materially injurious to the company or materially violates laws, regulations, or the articles of incorporation—to bring a lawsuit on behalf of the company against the wrongdoing director or supervisor (a "derivative suit"). The Center also may ask the court to render a judgment or ruling to dismiss the director or supervisor (a "discharge suit"). Article 10-1 also exempts the Center, in exercising this power, from certain procedural and shareholding requirements of the Company Act, to ensure that the derivative suit and discharge suit mechanisms can operate realistically and feasibly and achieve the timely dismissal of unsuitable directors and supervisors, to protect the rights and interests of securities investors and futures traders and promote the sound development of the securities and futures markets.

Pursuant to the Securities Investor and Futures Trader Protection Act Article19(a) and the Regulations Governing the Securities Investor and Futures Trader Protection Institution Article9, the Center is a shareholder of all TWSE/TPEx listed companies and promotes shareholder activism.

The Center provides consultation on rules and regulations on securities and futures trading, or civil disputes arising from securities issuance, IPO, securities or futures transactions or other relevant issues among investors and securities issuers, securities firms, securities services providers, futures firms, the Taiwan Stock Exchange, Taipei Exchange, settlement institutions, and others.

When an individual is involved in a dispute related to the trading of securities or futures, the person may bring a civil lawsuit or apply to an impartial organization for mediation. The Center has a mediation committee as required by the Act to provide mediation for civil disputes involving securities and futures investors. Any individuals who are involved in a dispute may apply for mediation with the Center.