As promulgated on May 13, 1997, Article 8 of the Enforcement Rules and Review Procedures for Directors’ and Supervisors’ Shareholding Percentages at Publicly-held Corporations prescribed that, “Where the directors or supervisors of a publicly-held corporation as a whole respectively fail to make up the difference between their shareholdings and the specified percentages of the total shares outstanding under Article 2 within the period prescribed under Articles 4 and 5, the directors or supervisors as a whole respectively shall be punishable under Article 178, Paragraph 1, Subparagraph 4 of the Securities and Exchange Act (Paragraph 1).　Where a legal person is elected as a director or a supervisor and is found to be in violation of the preceding paragraph, the person who is in charge of the legal person shall be subject to the punishment; where the representative of a legal person is elected as a director or a supervisor and is found to be in violation of the preceding paragraph, such a representative shall be subject to the punishment (Paragraph 2).”　 Paragraph 1 and the second half of Paragraph 2 of the above-quoted regulation were promulgated to punish those who violate the Enforcement Rules and Review Procedures for Directors’ and Supervisors’ Shareholding Percentages at Publicly-held Corporations promulgated under Article 26, Paragraph 2 of the Securities Exchange Act in accordance with Article 178, Paragraph 1, Subparagraph 4 of the Securities Exchange Act, as amended on July 19, 2000, to hold them jointly and severally liable for breaching their collective duty under administrative law.　Both Paragraph 1 and the second half of Paragraph 2 limit people’s rights and were promulgated without statutory authorization; hence, they are in contravention to the principle of legal reservation under Article 23 of the Constitution.　Accordingly, Paragraph 1 and the second half of Paragraph 2 of Article 8 of the Enforcement Rules and Review Procedures for Directors’ and Supervisors’ Shareholding Percentages at Publicly-held Corporations, as promulgated on May 13, 1997, shall no longer be applicable six months after this Interpretation is published.

　　　 We have repeatedly held that the punishment for people’s breaches of duty under administrative law limits people’s rights, and both the elements of the punishment and the legal effects shall be prescribed by law or regulation with clear statutory authorization in order to be in accordance with the principle of legal reservation under Article 23 of the Constitution (See J.Y. Interpretations Nos. 394, 402 and 619).　The punishment of an administrative sanction is premised upon the breach of administrative duty.　A person who institutes the action which in turn constitutes the elements of breaching the duty under administrative law shall be subject to punishment under relevant law and regulation.　The legislative branch may enact a law to impose special duties on specific persons to prevent others from breaching their duties under administrative law and thus make those specific persons liable for failing to fulfill their administrative duties.　Hence, the stipulation of liable persons in administrative sanctions actually involves the limitation on people’s rights and can not be regulated by regulation without an enactment or a clear statutory authorization in order to be in accordance with the requirements of legality and clarity of punishment in a rule-of-law nation.　When there are multiple persons who breach the same administrative duty under law, their individual liability shall in principle be determined in accordance with the degree of respective individual breaches (See Article 14, Paragraph 1 of the Administrative Sanction Act).　If the legislative branch deems it necessary to utilize a different way to determine individual liability, because of the involvement of limitation on people’s rights, it may do so by enacting a law to stipulate the individual liability or to authorize the promulgation of a regulation to enable the agency-in-charge to stipulate the individual liability in order to be in accordance with the principle of legal reservation under Article 23 of the Constitution.　It goes without saying that the contents of the relevant law or regulation shall be in accordance with the principle of proportionality.

　　　 Article 26 of the Securities Exchange Act prescribes that, “The shareholding of non-bearer shares of directors or supervisors of a publicly-held corporation as a whole respectively shall not be less than a specified percentage of the total shares outstanding (Paragraph 1).　The enforcement rules and review procedures for directors’ and supervisors’ shareholding percentages pursuant to the preceding paragraph shall be promulgated by the agency-in-charge (Paragraph 2).” Furthermore, Article 178, Paragraph 1, Subparagraph 4 prescribes that anyone who violates the Enforcement Rules and Review Procedures for Directors’ and Supervisors’ Shareholding Percentages at Publicly-held Corporations promulgated by the agency-in-charge under Article 26, Paragraph 2 of the Securities Exchange Act shall be punished with a pecuniary fine of not less than New Taiwan Dollars (NTD) 120,000 and not more than NTD 600,000.　Paragraph 2 of the same article also prescribes that in addition to the pecuniary fine stipulated in the preceding paragraph, the agency-in-charge shall order the violator to comply with the law and regulation within a specified period of time.　If the violator fails to comply, the agency-in-charge may set a new period of time for compliance and imposes an additional pecuniary fine of not less than NTD 240,000 and not more than NTD 1,200,000 upon the violator for each subsequent failure to comply until the corrective action has been taken.

　　　 Pursuant to the statutory authorization of Article 26, Paragraph 2 of the Securities Exchange Act, the agency-in-charge promulgated “the Enforcement Rules and Review Procedures for Directors’ and Supervisors’ Shareholding Percentages at Publicly-held Corporations” (hereinafter the “Enforcement Rules”).　Several amendments were made subsequently.　As amended and promulgated on April 25, 1989, Article 2 of the Enforcement Rules prescribed that the shareholding of non-bearer shares of directors or supervisors of a publicly-held corporation as a whole respectively shall not be less than a specified percentage of the total shares outstanding.　As amended and promulgated on January 10, 1989, Article 4 of the Enforcement Rules prescribed that upon their elections in the shareholder meeting, if the shareholdings of the entire body of directors and supervisors respectively are less than the percentage specified under Article 2, the directors or supervisors as a whole shall make up the difference within one month.　Article 5, Paragraph 1 of the Enforcement Rules prescribed that if during his/her term of office any director or supervisor of a publicly-held corporation transfers his/her shares or resigns and such a transfer or resignation makes the shareholdings of directors or supervisors as a whole respectively fall under the percentages specified under Article 2, the directors or supervisors as a whole respectively shall make up the difference within one month.　Article 5, Paragraph 2 of the Enforcement Rules prescribed that if the shareholdings of directors or supervisors as a whole respectively fall under the percentages specified under Article 2, the corporation shall notify all directors or supervisors respectively to make up the difference within the period prescribed by the preceding paragraph.　Hence, if upon the receipt of lawful notifications, the directors or supervisors of a publicly-held corporation as a whole respectively fail to make up the difference between their shareholdings and the specified percentages of the total shares outstanding under Article 2 within the period prescribed under Articles 4 and 5, due to their breaches of their duty to make up, they shall be subject to the punishment under Article 178, Paragraph 1, Subparagraph 4 of the Securities Exchange Act.

　　　 As promulgated on May 13, 1997, Article 8 of the Enforcement Rules prescribed that, “Where the directors or supervisors of a publicly-held corporation as a whole respectively fail to make up the difference between their shareholdings and the specified percentages of the total shares outstanding under Article 2 within the period prescribed under Articles 4 and 5, the directors or supervisors as a whole respectively shall be punishable under Article 178, Paragraph 1, Subparagraph 4 of the Securities and Exchange Act” (Paragraph 1).　Where a legal person is elected as a director or a supervisor and is found to be in violation of the preceding paragraph, the person who is in charge the legal person, shall be subject to the punishment; where the representative of a legal person is elected as a director or a supervisor and is found to be in violation of the preceding paragraph, such a representative shall be subject to the punishment” (Paragraph 2).　The clause “the directors or supervisors as a whole respectively shall be punishable” in Article 8, Paragraph 1 of the Enforcement Rules is a special rule to “punish all violators as a whole” for they all are violators of the same duty under administrative law and for there are multiple persons who breached the same administrative duty under law.　The second half of Paragraph 2 of Article 8 of the Enforcement Rules making “the representative punishable” is also a special rule to hold the representative of a legal person who is elected as a director or supervisor in his/her individual capacity directly liable because the real violator is a legal person.　Nevertheless, Article 26, Paragraph 2 of the Securities Exchange Act simply authorizes the agency-in-charge to promulgate “the Enforcement Rules and Review Procedures for Directors’ and Supervisors’ Shareholding Percentages at Publicly-held Corporations”, and the statutory language is silent in respect to the liable persons and the determination of individual liability for multiple persons who breach the same duty collectively.　Thus, Paragraph 1 and the second half of Paragraph 2 of Article 8 of the Enforcement Rules apparently exceed the statutory authorization of Article 26, Paragraph 2 of the Securities Exchange Act.　Moreover, Article 178, Paragraph 1, Subparagraph 4 of the Securities Exchange Act only prescribes the categories and legal effects of people’s breaches of the duties under administrative law.　It does not prescribe the way of attribution or the liable persons, nor does it authorize the agency-in-charge to promulgate supplemental regulation.　To sum up, Paragraph 1 and the second half of Paragraph 2 of Article 8 of the Enforcement Rules were promulgated to punish those who violate the Enforcement Rules promulgated under Article 26, Paragraph 2 of the Securities Exchange Act in accordance with Article 178, Paragraph 1, Subparagraph 4 of the Securities Exchange Act to hold them jointly and severally liable for breaching their collective administrative duty under law of preventing their shareholdings as a whole respectively from falling under the specified percentage of the total shares outstanding.　Both Paragraph 1 and the second half of Paragraph 2 of Article 8 of the Enforcement Rules are promulgated without clear statutory authorization, and are in contravention to the principle of legal reservation under Article 23 of the Constitution.　Thus, they shall no longer be applicable six months after this Interpretation is published.

　　　 With respect to the regulation that the directors and supervisors should make up the difference between their shareholding and the specified percentage of the total shares outstanding, it falls within the scope of administrative duties under law.　　Therefore, it is not punitive in nature and hence is different from a pecuniary fine, which is a kind of administrative sanction in nature.　If a relevant law or regulation holds one who violates the administrative duty under law to be punishable and offers no exemption for fulfilling his/her administrative duty under law, such law or regulation will not give rise to the issue of the principle of res judicata.　It goes without saying that the legislative branch shall take into account the legislative purpose of the Securities Exchange Act, within a reasonable and necessary scope, to enact a law to stipulate or to authorize the agency-in-charge to stipulate whether individual directors or supervisors who as a whole fail to make up the difference between their collective shareholdings and the specified percentage of the total shares outstanding shall be either jointly liable, or equally liable, or liable under some other stipulation, and whether the liable person shall be the legal person or the representative of the legal person when the representative of a legal person is elected as a director or supervisor and how to differentiate the different administrative duties imposed under law.　Besides, it is also noteworthy that the appropriateness of enacting a law to impose a mandatory duty on directors and supervisors of publicly-held corporations to require them to own collectively a specified percentage of the total shares outstanding shall be continuously under review while taking into account the development of securities markets and the purposes of developing the national economy and of protecting investors.