08 Apr 2019 New FSC Director and Supervisor Restrictions & National Transportation Safety Investigation Council Established
FSC to Restrict Inappropriate Directors and Supervisors from Rehirement
The Financial Supervisory Commission (FSC) pre-announced the draft amendments to Securities Investor and Futures Trader Protection Act on April 3 to safeguard the rights and interests of securities investors and futures traders and promote the sound development of the securities and futures markets.
Following the trend of internationalization and liberalization of the capital market, it is essential for the government to provide a fair and secure trading environment. As the SFIPC has been established for 15 years, the FSC found it necessary to have a complete class actions and derivative suits legal framework and promote corporate governance, and therefore amend the Securities Investor and Futures Trader Protection Act.
The official of FSC explained that the amendments to the Protection Act have revised three clauses and add two new ones.
First of all, the new law will include the directors or supervisors of Over the Counter Company in the scope of the litigation and dismissal of litigation represented by the SFIPC.
Secondly, in case a director or a supervisor has committed any act resulting in material damages to the company, he might face a lawsuit filed by SFIPC as well, regardless the act is in the course of performing his/her duties or not. That is to say, directors or supervisors committed insider trading and manipulation of stock prices and other market transactions that result in the loss of the company or the investors within the scope of such legislation.
Third, when the company has filed a lawsuit for the dismissal directors, and the SFIPC has the authority to subrogate the lawsuit.
Fourth, the reason for dismissing the dismissal of the directors or supervisors is not limited to the ones that occurred during the term of the prosecution. This means that even if directors have resigned, once the SFIPC finds that it has harmed the company’s actions while in office, it can still file the complaint. However, such complaint may not be made where two years have elapsed after the discovery of the fact, or ten years have elapsed after the conclusion from the damage caused.
Fifth, when the SFIPC represents the litigation procedure, it could participate in litigation as an independent intervener. And most importantly, once removal of directors by court order is determined in the final judgment, the person may not take the office of a director, supervisors of a listed or OTC company within three years after he leaves his post.
The FSC declared that the notice period is 60 days, while a public hearing will be held during that period. The fearing will discuss whether the managers shall be the contesting party when the Securities and Futures Investors Protection Center(SFIPC) bringing class actions and derivative suits on behalf of investors and listed companies in a derivative action or lawsuits with regard to the removal of directors.
Legislature Set Up National Transportation Safety Investigation Council After Puyuma Train Accident
As the 2018 Yilan train derailment killed 18 people and injuring 187, a major amendment to Aviation Occurrence Investigation Act was introduced into the legislation by the Executive Yuan. On April 2, the parliament passed the amendment on third reading and renamed the Act as Transportation Occurrence Investigation Act.The amendment stipulated that Aviation Safety Council will be replaced by the National Transportation Safety Investigation Council (NTSIC) to independently investigate major aviation, railway, water and highway transportation accidents to safeguard the transportation safety of the people. It is possible that the Puyuma Accident happened last October will be re-investigate after the establishment of the NTSIC, according to the press.
The new council, estimated to be set up by the Executive Yuan this August, it will expanded from 25 to approximately 100 personnel, including 5 full-time members and 6 concurrent members who are distinguished experts in the field of transportation, aviation, waterway, railway, highway, management, legal, psychological, medical, meteorological, mechanical, electronic, engineering or other transportation accident investigations.
The Act restricted that committee member with the same political party membership shall not exceed one-third of the total. The core member will also be barred from taking up posts at entities that could create conflicts of interests during active service and within three years of leaving their posts, with the Commissioner and the deputy as well as prohibited from serving as a director, supervisor, manager or consultant of the transportation company they investigate while on the council.
Based on the Act, the Transportation Safety Investigation Council will be responsible for tackling notification, investigation, identification and analysis of major transportation accidents, suggestions for investigation and remediation plan of transportation safety; trend analysis of transportation accidents, tracking of transportation safety remediation plan and transportation safety project research; transportation accident investigation technology Research and development, energy establishment, recorder interpretation and engineering analysis. In addition, the formulation, revision, and the abolition of transport accident investigation and decree, coordination and contact between domestic and foreign transportation accident investigation organizations and transportation safety organizations; and other investigations concerning major transportation accidents are the duties which NTSIC shall carry out independently according to law.
After the release of the transportation accident investigation report, if new facts or new evidence, which the Committee find it important and might affect the investigation report, the accident shall be re-investigated.
The report must consider its impartiality, demand, and professionalism. The council may seek assistance from foreign counterparts if it is necessary to uphold the impartiality and professionalism of an investigation.
Eventually, the act forbids any personnel who operate aircraft from tampering with the flight recorder or risk a fine of between NTD$1.2 million and NTD$6 million. If the obligor does not notify the government without proper reasons, it can be fined for NTD$ 500 thousand to 2.5 million. The notification obligor must notify within 2 hours of the incident, and the suspected situation must be notified within 24 hours.
Feel free to contact asiallians@asiallians.com for more information.