Cathay FHC has set up a "Corporate Sustainability Committee" under the board of directors and has set up a "Sustainable Governance Working Group" to promote corporate governance matters such as integrity management, anti-corruption, anti-bribery and compliance with the group, and report to the board of directors every six months. The Administrative Office of Cathay FHC set “Policy and Code of Operation Integrity”, and the formulation, amendment, or repeal of this policy and code shall be subject to the approval of the board. The board of directors has made great efforts to ensure that the integrity management policies are implemented. Furthermore, in order to improve the integrity of the company, the auditing unit shall incorporate the compliance with this code into the scope of the investigation and report to the board on a regular basis the lack of improvement.

Cathay FHC shall conduct business activities in a fair and honest manner. Before the business dealings, Cathay FHC shall take into account the legality and credibility of the commercial objects. It shall avoid trading with the record of dishonesty and sign with others contract should contain integrity terms. The directors shall uphold the high degree of self-discipline and shall, when they have an interest in their own motions, should explain the important contents of their own interests when the board of directors is concerned. If the directors are interested in the interests of Cathay FHC, they shall not be included in the discussion and voting, and shall be avoided when discussing and voting, and shall not act on behalf of other directors to exercise their voting rights. For more detailed information: Cathy Financial Holdings Policy and Code of Operation Integrity

Cathay held training courses related to business integrity in 2022 in order to implement business integrity and ethical conduct (such as annual training courses regarding the Code of Conduct for Employees and compliance for newcomers), which amounted to a total of 1,306 hours with 909 participants.

Furthermore, Cathay FHC established the Code of Conduct for Reporting Unethical or Dishonest Cases and a whistleblower system, which establish reporting channels, specifies procedures for handling cases, and protects the legal rights of the involved parties. The Company is required to maintain confidentiality of the identity of all involved parties, including the whistleblower and investigation personnel, in order to protect them from unfair treatment or retaliation. We were not involved in any insider trading, anti-competitive actions, monopoly or market manipulation, and immoral or unethical conduct from aforementioned channels in 2022. 
For other cases, please see our report.

 

Preventing Insider Trading

Cathay FHC submits “Notes on Reporting of Insider's Equity Change in the Company” when the insiders such as directors, managers and others take office to comply with it, so as to avoid violations or occurrences of insider transactions. In addition, Cathay FHC also files the "Director's Manual" and the "Compliance Brochure for Directors and Supervisors of TWSE/TPEx-Listed and Emerging Market Companies", "Directions of Securities Market Regulatory for the TWSE/TPEx-Listed company and its directors, supervisors and major shareholders" and "Compliance Brochure for Independent Directors" and other information which are compiled by the Taiwan Stock Exchange Corporation when the Directors take office to assist Directors in understanding the laws and regulations related to securities transactions and listing rules and other relevant reporting matters and legal responsibilities.

In addition, in order to standardize the procedures of disclosure and management mechanisms of Cathay FHC and its subsidiaries’ material information, Cathay FHC established “Guidelines/Regulations of Disclosure of Cathay FHC and its subsidiaries’ Material Information ”and “Regulations of Press Conferences Concerning Material Information of Cathay FHC and its subsidiaries” by referring to the“ Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities”. Through disclosing those rules mentioned above in the rules and regulations zone of Cathay FHC’s internal website, personnel throughout all levels of the Company can enquiry at any time, so as to avoid violating or occurring insider trading.

Cathay FHC also has stipulated “Policy and Code of Operation Integrity”, “Procedures and Guidelines of Integrity Management Operation”, “Code of Ethics” and “Code of Conduct of Employees”, all of which contain the relevant provisions of “Prohibition of Insider Trading”. Cathay FHC holds educational trainings annually for directors, managers, and employees on the "Code of Integrity, Ethics, and Conduct," and the 2022 training has been completed in December, 2022:

For understanding and complying Cathay FHC’s "Policy and Code of Operation Integrity", " Procedures and Guidelines of Integrity Management Operation" and "Code of Ethics", the Company submits those rules and policies to the Directors, and publishes on the internal educational training platform for employees to check at any time. Besides to the prohibition of insider trading, the educations and trainings include the contents and cases of anti-money laundering, prohibition of getting gifts and hospitality, participation in public affairs, political contributions, etc.Cathay FHC has notified the directors not to trade the company's stocks during the closed period of 30 days before the announcement of the annual financial report and 15 days before the announcement of the quarterly financial report in accordance with " The Policy of Prevention of Insider Trading ". The date when the financial report is scheduled to be submitted to the board of directors and the closed period of the company's stock trading are notified to the directors to follow, so as to prevent the directors from violating The Policy.

 


At Cathay FHC, we prioritize compliance management and strive to deepen our compliance culture across the group. To achieve this, we monitor domestic and overseas financial regulatory changes and take appropriate measures to ensure that all of our businesses are fully compliant with regulatory requirements. Group compliance and AML/CFT are managed as a whole at the group level and implemented by level and region. The board of directors appoints the Chief Compliance Officer / Chief AML Officer to manage the group's compliance matters; the CCO reported on compliance matters to the board of directors and the Audit Committee twice in 2022.

 

Systematic Management of Compliance Risks

At Cathay FHC, compliance is a key aspect of our internal control implementation, with risk management at the core. We adopt a dynamic management model and prioritize prevention over response to maintain a proactive approach to compliance. In addition to promoting compliance with international regulations, we supervise our key subsidiaries to implement compliance risk management measures. We also leverage a compliance digital management platform and new technologies to strengthen the Group's internal control management.

 

 

 

Promoting Compliance Education Courses and Actively Cultivating Technology Compliance/AML Talent

To promote compliance awareness among employees and cultivate technology compliance/AML talent, Cathay FHC offers a wide range of compliance/AML training in line with the latest technological developments. Topics range from compliance fundamentals, emerging developments in financial crimes, new ESG values and the impact on directors' responsibilities and corporate governance, stakeholder transaction case study analysis, metaverse industry risks, financial information security trends, and insider trading / anti-bribery/corruption prevention regulations and case studies. Furthermore, Cathay actively nurtures technology compliance/AML professionals through project implementation that combines digital technology with professional experiences. These projects provide talent development opportunities to expand the talent pool in this area.


Strengthening AML/CFT/PF System

AML/CFL are top priorities on an international level. We adopt a "risk-based" approach to establish a group-wide management mechanism for AML/CFL. We also have an information-sharing system in place with Cathay FHC's operations as its core. We aim to remain compliant with financial regulations while continuing to grow our business. To achieve this, we regularly update and refine our risk assessment methodologies, leveraging technology and data analytic tools to enhance the effectiveness of our AML/CFL management actions.


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