July 2023
Teresa Huang and Lilian Hsu
On May 30, 2023, the Legislative Yuan passed the amendment bill to the “Securities Investment Trust and Consulting Act,” adding Articles 70-1 and 113-1, which took effect on June 28, 2023. The primary purpose of this amendment is to combat investment fraud, and the key amendments are summarized as follows:
1. Regulations for the publication of investment advertisements
(1) Entities that are not securities investment trust and consulting enterprises (“Investment Trust and Consulting Entities”) but involved in advertising related to securities investments or business solicitation shall not engage in the following activities:
- Misleading people into believing that their business is approved by the competent authority to operate regulated financial services.
- Soliciting or inducing investments while engaging in investment analysis with the purpose of providing investment advice on securities.
- Making representations that guarantee profits or assume losses in securities investments.
- Using various recommendations, thank-you letters, past performance records, or similar texts or representations that may mislead people into believing that securities investments can guarantee profits.
- Exploiting the names of political, financial, economic, film, television, or other prominent figures or companies to promote, solicit, or entice investments in securities.
- Engaging in other inappropriate promotion activities related to the aforementioned behaviors.
(2) Implementation of a real-name system for investment advertisements
Internet platform providers, Internet application service providers, Internet access service providers, or other Internet media operators (collectively referred to as “Internet Service Providers”) publishing or broadcasting advertisements related to securities investments or business solicitation that are not associated with Investment Trust and Consulting Entities shall include or state the information of the advertiser, funder, and other relevant information in the advertisements.
(3) Removal of illegal advertisements
Internet Service Providers shall not publish or broadcast advertisements that violate the aforementioned regulations (“Illegal Advertisements”). If they become aware of any legal violations after publication or broadcasting, they should take necessary actions such as removal, restricting access, ceasing broadcast, or other appropriate measures.
2. Legal responsibilities for violations
(1) Liability for compensation
Internet Service Providers that publish or broadcast the Illegal Advertisements, except for those who have already taken necessary actions such as removal in accordance with the stipulations above, shall be jointly and severally liable for damages with the advertiser and funder for those who suffer losses due to believing the content of the advertisements or being deceived.
(2) Administrative responsibilities
If Internet Service Providers fail to comply with the order to remove, restrict access, cease the broadcast of the Illegal Advertisements, or take other necessary measures within the specified time limit, the authority that issued the order may impose a fine of no less than TWD 120,000 and no more than TWD 600,000 and order the violator to make improvements within a specified period. If no improvement is made by the deadline, the fine may be imposed consecutively, ranging from two to five times per time, until the required improvement is adequately made.
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