Article 12 of the Act for Worker Protection of Mass Redundancy prohibits the chairman and actual responsible person of a business organization that has undermined the rights and interests of workers in material aspects through mass redundancy from leaving this country in order to arrive at a solution(Taiwan)

2016.08.05
Oli Wong

The Financial Supervisory Commission issued the Jin-Guan-Zheng-10500278285 Circular of August 5, 2016 (hereinafter, the “Circular”) to indicate that securities firms are required to set aside a special reserve to address the transitional needs of their employees to accommodate the development of financial technologies and to safeguard employees’ rights and interests.

Pursuant to Article 14 of the Regulations Governing Securities Firms, and Article 18 of the Regulations Governing Futures Commission Merchants, securities firms and futures commission merchants are required to set aside 20% of their annual aftertax earnings as a special reserve. However, in light of the development of financial technologies, the Circular indicates that to safeguard the rights and interests of the employees of securities firms, securities investment trust enterprises and futures commission merchants, when securities firms, securities investment trust enterprises and futures commission merchants declare their annual earnings for 2016 through 2018, they are required to set aside a special reserve, which ranges from 0.5% to 1% of their aftertax net income.

This Circular further points out that beginning with fiscal year 2017, securities firms, securities investment trust enterprises and futures commission merchants may reverse the same amount of the expenditures in employees’ transitional education and training, career transformation or placement as generated from the development of financial technologies within the scope of the above-mentioned special reserve. Meanwhile, the internal audit department should include the status of the special reserve reversal into the scope of random internal audit.