The Financial Supervisory Commission (hereinafter referred to as the FSC) announced on March 24, through FSC Securities and Exchange Letter No. 1150380895, the amendment and adoption of Article 44-11 of the "Regulations Governing the Administration of Shareholder Services of Public Companies" (hereinafter referred to as the Regulations) regarding the restrictions on video conferencing for shareholder meetings. The Regulations are authorized under Article 22-1, Paragraph 2 of the Securities and Exchange Act and have undergone 21 revisions to date.

Previous amendments to Article 172-2 of the Company Act explicitly stipulated that a company may specify in its articles of incorporation that meetings may be conducted via video conference or other methods announced by the competent authority. However, a proviso noted that in the event of force majeure such as natural disasters, the competent authority may announce that companies may conduct meetings via video conference or other announced methods for a certain period without requiring such provisions in the articles of incorporation. Regarding the location of participants and recorders, as well as voting methods, since these fall under matters of corporate autonomy, companies may determine them at their discretion.The minutes may record the meeting link and shareholder identification methods used. However, public companies shall still comply with conditions separately stipulated by the securities regulatory authority before conducting meetings via video conference. This raises the following issue: in the event of force majeure such as natural disasters, if companies are still required to comply with these conditions, it may disrupt normal operations and lead to disputes regarding potential harm to corporate governance.

Recently, the FSC amended Paragraph 3 of Article 44-11 of the Regulations, referencing the provisions of Article 172-2 of the Company Act. This amendment stipulates that in the event of force majeure, following an announcement by the Ministry of Economic Affairs, public companies may conduct shareholder meetings via video conferencing without being subject to the restrictions of the preceding two paragraphs. However, it should be noted that pursuant to Paragraph 3 of Article 44-9 of the Regulations, a resolution by the board of directors must still be passed before a video conference or video-assisted shareholders’ meeting may be held.

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References:

1. Q&A on the Amended Provisions of Article 172-2 and Article 356-8 of the Company Act.

2. Financial Supervisory Commission Securities and Exchange Letter No. 1150380895.

3. General Explanation of the Amendment to Article 44-11 of the Regulations Governing the Administration of Shareholder Services of Public Companies.