The Securities and Futures Bureau of the Financial Supervisory Commission (hereinafter, the “FSC”) issued the Zheng-Chi (Tou)-1050017277 Circular of May 13, 2016 (hereinafter, the “Circular”) to regulate matters concerning the accounting and disclosure of remuneration to directors, supervisors and employees of securities investment trust enterprises and securities investment consulting enterprises.
According to the Circular, the accounting and disclosure of remuneration paid to employees, directors, and supervisors of securities investment trust enterprises and securities investment consulting enterprises pursuant to a resolution adopted by the board of directors should be governed by the FSC’s Jin-Guan-Zheng-Shen-1050001900 Circular of January 30, 2016 beginning with 2016. To wit, a financial report is required to disclose the following information in addition to the disclosure of relevant information in the notes pursuant to the “share-based payment” provision under the International Financial Report Standard 2 (IFRS2): 1. The fixed amount or ratio of remuneration to employees, directors and supervisors under the articles of incorporation as well as information relating to the remuneration of employees, directors and supervisors as approved by the board of directors which can be obtained through channels such as the Market Observation Post System. 2. The estimation basis for the current estimated amount of remuneration to employees, directors and supervisors, the calculation basis for the number of shares distributed and the actual amount of distribution, and the accounting handling of any difference between such amount and the estimate. 3. The actual distribution of remuneration to the employees, directors and supervisors for the previous year (including the number of shares and amounts distributed and the share price) where the amount, reasons and handling of their difference, if any, with the remuneration to the employees, directors and supervisors as recognized should also be specified. When a resolution is adopted by the board of directors to distribute remuneration to the employees, directors and supervisors, the employee remuneration distributed in cash or by stock and the amount of remuneration to directors and supervisors should be disclosed in the Market Observation Post System. In case of any difference with the annually recognized amounts, the difference, reasons and handling should be disclosed.
This Circular also points out that if employee remuneration is paid by stock by a securities investment trust enterprise or by a securities investment consulting enterprise which is not a publicly offered company, the basis for calculating the number of shares provided as remuneration to the employees shall be the same as that for a publicly offered company which is not a listed (OTC) company as set forth in the previous circular.