The Financial Supervisory Commission (hereinafter, the “FSC”) issued the Jin-Guan-Zheng-Tou-Zi 10600514361 Directive of March 15, 2018 (hereinafter, the “Directive”) to relax the ruless for concurrent assumption of positions at overseas institutions by personnel of securities investment consulting enterprises. The rules came into effect on the date of the Directive.
I. Concurrent assumption of positions (Point 1):
The first point of the Directive indicates that the personnel set forth in Article 6, Paragraph 1 of the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Consulting Enterprises may concurrently assume another position at an overseas institution which has investment relations with the securities investment consulting enterprise or is related to the securities investment consulting enterprise because they are both controlled by the same parent company and thus are affiliated with the same group company. Such positions include: (1) directors and supervisors; (2) internal audit, legal compliance, risk management and accountants in charge at an overseas institution, which may be concurrently assumed by personnel of a securities investment consulting enterprise who assume the same nature of positions; (3) directors of a company-type fund managed by an overseas institution; and (4) positions at an overseas institution which may be concurrently assumed due to compliance with the FSC’s Incentive Plan for Offshore Funds and with the FSC’s approval.
II. Approval of concurrent assumption of positions (Point 2):
The Directive further points out that a securities investment consulting enterprise subject to any of the following circumstances involving concurrent assumption of positions shall include documents such as minutes of board meetings, a list of personnel who are going to assume concurrent positions, a description indicating that there is no conflict of interest and relevant internal control systems in application to the FSC for approval before such concurrent assumption of positions is permitted: (1) the personnel to be dispatched by the securities investment consulting enterprise are general managers and department heads; (2) the positions at overseas institutions which will be concurrently assumed are those set forth in Subparagraph 4 of Point 1 in this Directive.
III. Registration of concurrent assumption of positions (Point 3):
A securities investment consulting enterprise sending personnel to serve concurrently another position at an overseas institution under Point 1 of the Directive shall register and create a file with the Securities Investment Trust and Consulting Association of the R.O.C (hereinafter, the “SITCA”). If such concurrent assumption no longer continues, the securities investment consulting enterprise shall cancel the registration of the concurrent assumption of another position by such employee with the SITCA within five business days after the after the date of factual occurrence.
IV. Matters to be noted for concurrent assumption of positions (Point 4):
Finally, according to the Directive, a securities investment consulting enterprise sending personnel to concurrently assume the positions set forth in Point 1 of the Directive shall comply with the following requirements: (1) Except for directors and supervisors, personnel dispatched by a securities investment consulting enterprise shall be primarily those assuming positions in Taiwan; and (2) a securities investment consulting enterprise is required to set up internal review and control mechanisms to ensure effective discharge of duties by personnel at their positions and other concurrent positions, to maintain the normal business operation of the securities investment consulting enterprise without any conflict of interest, violation of securities-related requirements or its internal control system, and to safeguard the rights and interests of the beneficiaries or customers.