In order to encourage offshore fund institutions to expand the asset management business in Taiwan on a long-term basis and continuously invest resources to enhance Taiwan’s core manpower of asset management, the Financial Supervisory Commission(“FSC”), taking into account the views of the Securities Investment & Consulting Association and industry participants, has amended the “Incentive Policy for Offshore Funds Development in Taiwan ” (hereinafter referred to as the Policy) and the relevant Q&A set. The amended content includes provision of optional preferential measures for those having been recognized for a two-year period under the Policy, and addition of the evaluation indicator for the headcounts of investment research and analysis as well as the evaluation criteria for adjustment to specific evaluation indicators, in order to provide incentives for more offshore fund institutions to participate in the Policy.
The key points of the amendments are as follows:
I.     Provision of optional preferential measures for those having been long-term recognized: For those with an applicable recognition period of two years, it is added that preferential measures applicable may be respectively proposed for the first and second years of the recognition period, in order to encourage those that have obtained long-term recognition under the Policy, and provide flexible use of preferential measures corresponding to their operational objectives and development.
II.     Adjustment to the benchmark for measuring the size of assets managed by offshore fund institutions in Taiwan: By referring to the Incentive Policy for Onshore Fund on the calculation of average size of assets managed by local operators in the past year, money market funds and ETF are excluded from the calculation of the average size of assets managed, and the threshold for the measurement standard is adjusted to encourage offshore fund institutions to develop diversified fund products in established  asset management in Taiwan.
III.     Encouraging continuous talent cultivation by offshore fund institutions: The headcounts of investment research and analysis of Taiwan asset management of offshore fund institutions is added as an evaluation item to encourage offshore fund institutions to enhance resource allocation in cultivating core asset management talents in Taiwan.
IV.     Adjusting preferential measures to increase incentives:
(I) Add multiple asset funds to the examples of preferential measures under “introducing new types of offshore funds” to encourage business operators to introduce diversified products.
(2) Revise the original preferential measures under “accelerate the review of offshore funds” to “declarer offshore funds’ fundraising and sales cases in accordance with Article 27-2 of the     Regulations Governing Offshore Funds” (Effective registration system will be adopted for offshore fund offering).
(3) Relax the scope of application of preferential measures under “maximum number of funds per submission is three”, i.e. when the master agent applies for the agency for three funds in one go, the original restriction of “can only apply on behalf of the same offshore fund institution” is relaxed to “may apply for funds of one or more offshore fund institutions to which the preferential measures are applicable”.
The adjustments to relevant evaluation indicators and preferential measures according to the amended Policy are expected to attract more offshore fund institutions to participate in the Policy on a long-term basis, encourage their Taiwan’s asset management to develop diversified fund products, and increasing the recruitment of core talents in asset management, to facilitating the robust development of Taiwan’s asset management sector. In the future, the FSC will continue to review the content of the Policy to encourage and affirm offshore fund institutions that making efforts to contribute to asset management market of Taiwan.
Contact unit: MR.Yeh, Section Chief , SITE and SICE Group, Securities and Futures Bureau
Tel: (02) 2774-7357
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