The Financial Supervisory Commission (FSC) on Saturday increased punishments for Chinese investors who illegally purchase local shares.
The new regulations were implemented after the legislature amended the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例) last week, raising the maximum fine for such unlawful investment from NT$600,000 to NT$25 million (US$19,046 to US$793,575), Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told the Taipei Times by telephone yesterday.
“The amendment enabled the FSC to introduce higher punishments for those breaking the rules and they are expected to deter breaches of the regulations,” Tsai said.
Chinese investors who illegally buy shares of local companies would be classified into four groups based on the amount of their investment, with higher investment subject to heavier penalties, Tsai said.
The commission would assess the investment based on how much Chinese investors spent, rather than the value of the shares they own, given that share prices fluctuate, she said.
Those who spend less than NT$10 million buying local shares and have a less than 1 percent stake in a company would be asked to sell the shares first without incurring any fine, while those who hold more than a 1 percent stake in a company would be fined NT$120,000, Tsai said.
“This group will receive the smallest fine, as we think there will still be some companies accidentally making the wrong investments,” she said.
Those who spend more than NT$10 million, but less than NT$100 million would be subject to a fine of 2 percent of their investment, Tsai said.
Those who spend more than NT$100 million, but less than NT$300 million would be subject to a fine of 3 percent of their investment amount, while those spend more than NT$300 million would be subject to a find of 4 percent of the investment, she said.
If the investor serves as a board member or supervisor of the company, or tries to evade inspections, they would receive the highest fines, Tsai said.
The amendment was passed after Hong Kong Dragon Peak International Co Ltd (香港龍峰國際) illegally acquired Tatung Co (大同) shares and has repeatedly been fined by the commission since 2017, but has still retained its stake.
The commission would not apply the new regulations to breaches that occurred before Saturday, Tsai said, adding that if investors breach the new rules after Saturday and are found to have made illegal investment previously, they would receive much higher fines.
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