May 2018
Relaxed requirements for concurrent assumption of positions at overseas institutions by personnel of securities investment trust enterprises (Taiwan)
2018.3.15
Teresa Huang
The Financial Supervisory Commission (hereinafter, the "FSC") issued the Jin-Guan-Zheng-Tou-1060051436 Directive of March 15, 2018 (hereinafter, the "Directive") to relax the requirements for concurrent assumption of positions at overseas institutions by personnel of securities investment trust enterprises.
The first point of the Directive first indicates that the personnel set forth in Article 7, Paragraph 1 of the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Trust Enterprises, namely the general managers, the vice general managers, assistant managers or managers of a sales department, the managerial officers of an affiliate, and the department heads and sales people of a securities investment trust enterprise may concurrently assume another position at an overseas institution which has investment relations with the securities investment trust enterprise or is related to the securities investment trust enterprise because they are both controlled by the same parent company and thus are affiliated with the same group company, including: (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 the personnel of a securities investment trust 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 or the Incentive Plan for Securities Investment Trust Enterprises and with the FSC's approval. The so-called "parent company," "control" and "group" shall be determined pursuant to International Accounting Standards Nos. 10, 11 and 28.
The Directive further points out that a securities investment trust 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 trust enterprise are the general managers or the vice general managers, assistant managers, managers or head of a sales department; or (2) the positions at overseas institutions which will be concurrently assumed are those set forth in Subparagraph 4 above.
A securities investment trust 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 trust enterprise shall cancel the registration of the concurrent assumption of another position by such employee with the SITCA within five business days after the date of factual occurrence. In addition, the following requirements shall be followed: (1) except for directors and supervisors, personnel dispatched by a securities investment trust enterprise shall primarily assume positions in Taiwan; and (2) a securities investment trust enterprise is required to set up internal review and control mechanisms to ensure effective discharge of duties by personnel at their original positions and other concurrent positions, to maintain the normal business operation of the securities investment trust 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.
Teresa Huang
The Financial Supervisory Commission (hereinafter, the "FSC") issued the Jin-Guan-Zheng-Tou-1060051436 Directive of March 15, 2018 (hereinafter, the "Directive") to relax the requirements for concurrent assumption of positions at overseas institutions by personnel of securities investment trust enterprises.
The first point of the Directive first indicates that the personnel set forth in Article 7, Paragraph 1 of the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Trust Enterprises, namely the general managers, the vice general managers, assistant managers or managers of a sales department, the managerial officers of an affiliate, and the department heads and sales people of a securities investment trust enterprise may concurrently assume another position at an overseas institution which has investment relations with the securities investment trust enterprise or is related to the securities investment trust enterprise because they are both controlled by the same parent company and thus are affiliated with the same group company, including: (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 the personnel of a securities investment trust 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 or the Incentive Plan for Securities Investment Trust Enterprises and with the FSC's approval. The so-called "parent company," "control" and "group" shall be determined pursuant to International Accounting Standards Nos. 10, 11 and 28.
The Directive further points out that a securities investment trust 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 trust enterprise are the general managers or the vice general managers, assistant managers, managers or head of a sales department; or (2) the positions at overseas institutions which will be concurrently assumed are those set forth in Subparagraph 4 above.
A securities investment trust 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 trust enterprise shall cancel the registration of the concurrent assumption of another position by such employee with the SITCA within five business days after the date of factual occurrence. In addition, the following requirements shall be followed: (1) except for directors and supervisors, personnel dispatched by a securities investment trust enterprise shall primarily assume positions in Taiwan; and (2) a securities investment trust enterprise is required to set up internal review and control mechanisms to ensure effective discharge of duties by personnel at their original positions and other concurrent positions, to maintain the normal business operation of the securities investment trust 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.
