On November 25, 2025, the Financial Supervisory Commission (FSC) amended the “Regulations Governing Investment by Financial Holding Companies,” substantially raising the threshold for mergers and acquisitions of financial institutions. In light of the recent wave of financial holding company acquisitions and the frequent occurrence of third-party intervention, the FSC has established more stringent M&A regulations through this amendment to ensure the order and stability of the financial market.

Key Amendment Highlights

1. Mandatory Controlling Stake Requirement
   Initial investments in financial institutions must acquire a controlling stake exceeding 25% of the total voting shares or total capital. This provision excludes speculative investments and explicitly requires investors to obtain substantive operational control, preventing speculative acquisitions from affecting financial stability.
2. Cash-Only Requirement for Tender Offer Consideration
   Considering that using newly issued shares as tender offer consideration creates price uncertainty and makes the stock prices of both parties susceptible to market interference, Article 2, Paragraph 6 stipulates that when a financial holding company invests in a publicly issued company through a tender offer, the consideration must be paid in cash with shares acquired in a single transaction, thereby reducing variables in the integration process.
3. Enhanced Internal Review Mechanisms
   The amended Article 3 requires that when financial holding companies plan initial investments, the matter must be reviewed by the audit committee before submission to the board of directors for resolution, and external independent experts must be engaged to provide opinions. Notably, the remuneration of external experts must not be linked to whether the investment case is completed, ensuring their independence and objectivity.
4. Information Control and Re-application Restrictions
   Article 8, Paragraph 1 mandates that tender offer conditions approved by the board of directors must be kept confidential to avoid affecting market order. Additionally, Paragraph 3 of the same article introduces a “cooling-off period” provision: if a financial holding company’s investment application is rejected by the competent authority, it may not apply to invest in the same investee entity for one year, encouraging applicants to adequately address deficiencies or communicate with stakeholders before reapplying.

It is recommended that financial holding companies pay special attention to relevant regulations when planning acquisitions to ensure smooth implementation of investment projects.