The Financial Supervisory Commission yesterday gave an overview of upcoming changes aimed at bolstering corporate governance through tougher regulation of major stakeholders of financial institutions.
The commission is set to tighten restrictions, barring responsible persons at financial institutions from holding concurrent key positions at other financial firms.
“The change addresses potential conflicts of interest when key people at financial companies are knowledgeable about and actively involved in the management of competitors in the industry,” FSC Chairman Wellington Koo (顧立雄) told a news conference in Taipei.
To ensure fair competition and to foster innovation in the financial sector, restrictions on concurrent engagements would be extended to responsible people at banks and financial holding companies, as well as interested parties, such as spouses and second-degree relatives.
For instance, Sylvia Peng (彭雪芬), spouse of Taishin Financial Holding Co (台新金控) chairman Thomas Wu (吳東亮), would be barred from concurrently serving as a director on the board of Shin Kong Financial Holding Co (新光金控) on behalf of a family-owned investment holding company, the commission said.
To improve oversight, financial companies that own assets worth NT$1 trillion (US$33.44 billion) and have a five-member board of directors would be required to give at least three seats on the board to industry experts, Koo said, adding that for every three seats added to the board of directors, one must be allocated to an industry expert, up from one in every four.
If a board of directors has more than 13 seats, at least five must be occupied by industry experts, to ensure diversity among directors and supervisors, Koo said.
The change would make it more difficult for companies to swap out their board appointees at investee companies, Koo said, adding that having a highly professional board of directors that is not subject to frequent shuffles would go a long way toward improving governance and compliance.
However, the change would not be imposed on state-run financial companies, as they are under additional supervision by the legislature and the government, the commission said.
Changes to the rules on concurrent engagements are expected to come into force by July 1 next year, it said.
Meanwhile, the commission said it would also tighten controls on proxy solicitation following a series of high-profile proxy fights over the past year.
Proxy solicitors must be a shareholder in the target company for at least one year and hold a stake of more than 0.005 percent of shares in circulation, up from a previous requirement of 0.002 percent, Koo said, adding that the change would take effect on Jan. 1 next year.
“The use of proxy solicitation has harmed governance as it allows major shareholders to yield influence that is disproportionate to their ownership of a company,” Koo said.
SELL-OFF: Investors expect tariff-driven volatility as the local boarse reopens today, while analysts say government support and solid fundamentals would steady sentiment Local investors are bracing for a sharp market downturn today as the nation’s financial markets resume trading following a two-day closure for national holidays before the weekend, with sentiment rattled by US President Donald Trump’s sweeping tariff announcement. Trump’s unveiling of new “reciprocal tariffs” on Wednesday triggered a sell-off in global markets, with the FTSE Taiwan Index Futures — a benchmark for Taiwanese equities traded in Singapore — tumbling 9.2 percent over the past two sessions. Meanwhile, the American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the TAIEX, plunged 13.8 percent in
A wave of stop-loss selling and panic selling hit Taiwan's stock market at its opening today, with the weighted index plunging 2,086 points — a drop of more than 9.7 percent — marking the largest intraday point and percentage loss on record. The index bottomed out at 19,212.02, while futures were locked limit-down, with more than 1,000 stocks hitting their daily drop limit. Three heavyweight stocks — Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Hon Hai Precision Industry Co (Foxconn, 鴻海精密) and MediaTek (聯發科) — hit their limit-down prices as soon as the market opened, falling to NT$848 (US$25.54), NT$138.5 and NT$1,295 respectively. TSMC's
TARIFFS: The global ‘panic atmosphere remains strong,’ and foreign investors have continued to sell their holdings since the start of the year, the Ministry of Finance said The government yesterday authorized the activation of its NT$500 billion (US$15.15 billion) National Stabilization Fund (NSF) to prop up the local stock market after two days of sharp falls in reaction to US President Donald Trump’s new import tariffs. The Ministry of Finance said in a statement after the market close that the steering committee of the fund had been given the go-ahead to intervene in the market to bolster Taiwanese shares in a time of crisis. The fund has been authorized to use its assets “to carry out market stabilization tasks as appropriate to maintain the stability of Taiwan’s
STEEP DECLINE: Yesterday’s drop was the third-steepest in its history, the steepest being Monday’s drop in the wake of the tariff announcement on Wednesday last week Taiwanese stocks continued their heavy sell-off yesterday, as concerns over US tariffs and unwinding of leveraged bets weighed on the market. The benchmark TAIEX plunged 1,068.19 points, or 5.79 percent, to 17,391.76, notching the biggest drop among Asian peers as it hit a 15-month low. The decline came even after the government on late Tuesday authorized the NT$500 billion (US$15.2 billion) National Stabilization Fund (國安基金) to step in to buoy the market amid investors’ worries over tariffs imposed by US President Donald Trump. Yesterday’s decline was the third-steepest in its history, trailing only the declines of 2,065.87 points on Monday and
RSS