September 2024
New FSC Requirements for Annual Reports Preparation and Gender Diversity (Taiwan)
September 2024
Teresa Huang and Elesha Wang
As previously mentioned in our article, "Important ESG Regulations that Listed and OTC-Traded Companies in Taiwan Should Comply with Starting from 2024" to help companies better align with the sustainability information disclosure standards in the International Financial Reporting Standards (IFRS) and to promote gender diversity on boards, the Financial Supervisory Commission (FSC) issued the latest revisions to the "Regulations Governing Information to be Published in Annual Reports of Public Companies" on August 1, 2024. The key points of these revisions are as follows:
1. Simplified Content and Preparation of Annual Reports
The latest revisions have removed certain items that were previously required in annual reports, such as company profiles, financial overviews, shareholder structures, and production and sales volume data from the past two years. Investors can still access this information through the company’s website or the Market Observation Post System.
2. Introducing the Information Indexing Function
For information already disclosed on the Market Observation Post System, the annual report may simply provide a reference index for accessing the data, with these disclosures considered part of the annual report. This change simplifies several items, including the internal control statement, and share transfers by directors, supervisors, managers, and major shareholders, thereby enhancing the efficiency of annual report preparation.
3. Promoting Gender Diversity on Boards
Starting from 2025, if directors of any single gender hold less than one-third of the seats on the board of a listed or OTC-traded company, the company must provide a detailed explanation in its annual report, along with specific measures to improve gender diversity.
Additionally, the FSC[1] is planning to revise the "Regulations Governing Information to be Published in Annual Reports of Financial Holding Companies," the "Regulations Governing Information to be Published in Annual Reports of Banks," and the "Regulations Governing Information to be Published in Annual Reports of Bills Finance Companies" to ensure that the standards for annual report preparation for all financial institutions are up-to-date.
[1] For more information, please refer to the FSC announcement at the following link: https://www.fsc.gov.tw/ch/home.jsp?id=96&parentpath=0,2&mcustomize=news_view.jsp&dataserno=202408200002&dtable=News (last visited September 12, 2024).
The contents of all materials (Content) available on the website belong to and remain with Lee, Tsai & Partners. All rights are reserved by Lee, Tsai & Partners, and the Content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior permission of Lee, Tsai & Partners.
The Content is for informational purposes only and is not offered as legal or professional advice on any particular issue or case. The Content may not reflect the most current legal and regulatory developments. Lee, Tsai & Partners and the editors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The contributing authors' opinions do not represent the position of Lee, Tsai & Partners. If the reader has any suggestions or questions, please do not hesitate to contact Lee, Tsai & Partners.
Teresa Huang and Elesha Wang
As previously mentioned in our article, "Important ESG Regulations that Listed and OTC-Traded Companies in Taiwan Should Comply with Starting from 2024" to help companies better align with the sustainability information disclosure standards in the International Financial Reporting Standards (IFRS) and to promote gender diversity on boards, the Financial Supervisory Commission (FSC) issued the latest revisions to the "Regulations Governing Information to be Published in Annual Reports of Public Companies" on August 1, 2024. The key points of these revisions are as follows:
1. Simplified Content and Preparation of Annual Reports
The latest revisions have removed certain items that were previously required in annual reports, such as company profiles, financial overviews, shareholder structures, and production and sales volume data from the past two years. Investors can still access this information through the company’s website or the Market Observation Post System.
2. Introducing the Information Indexing Function
For information already disclosed on the Market Observation Post System, the annual report may simply provide a reference index for accessing the data, with these disclosures considered part of the annual report. This change simplifies several items, including the internal control statement, and share transfers by directors, supervisors, managers, and major shareholders, thereby enhancing the efficiency of annual report preparation.
3. Promoting Gender Diversity on Boards
Starting from 2025, if directors of any single gender hold less than one-third of the seats on the board of a listed or OTC-traded company, the company must provide a detailed explanation in its annual report, along with specific measures to improve gender diversity.
Additionally, the FSC[1] is planning to revise the "Regulations Governing Information to be Published in Annual Reports of Financial Holding Companies," the "Regulations Governing Information to be Published in Annual Reports of Banks," and the "Regulations Governing Information to be Published in Annual Reports of Bills Finance Companies" to ensure that the standards for annual report preparation for all financial institutions are up-to-date.
[1] For more information, please refer to the FSC announcement at the following link: https://www.fsc.gov.tw/ch/home.jsp?id=96&parentpath=0,2&mcustomize=news_view.jsp&dataserno=202408200002&dtable=News (last visited September 12, 2024).
The contents of all materials (Content) available on the website belong to and remain with Lee, Tsai & Partners. All rights are reserved by Lee, Tsai & Partners, and the Content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior permission of Lee, Tsai & Partners.
The Content is for informational purposes only and is not offered as legal or professional advice on any particular issue or case. The Content may not reflect the most current legal and regulatory developments. Lee, Tsai & Partners and the editors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The contributing authors' opinions do not represent the position of Lee, Tsai & Partners. If the reader has any suggestions or questions, please do not hesitate to contact Lee, Tsai & Partners.
