1.Amendments to the Incentive Policy for Offshore Fund Development in Taiwan to encourage offshore fund institutions to expand their asset management business in Taiwan
In order to increase the contribution of offshore fund institutions to the domestic asset management industry, the FSC announced the amendments to the aforementioned Policy on February 27, 2019, which increases the flexibility of preferential measures regarding the applicable ceiling on total amount of securities investments in Mainland China by an offshore fund. According to the amendment, an offshore fund institution can choose between two options for compliance with the ceiling requirement. One of the options is the existing provision, which prescribes the total amount of investments in securities in Mainland China by any offshore fund offered and sold in Taiwan shall not exceed 40% of the net asset value of the offshore fund during one year period after the offshore fund institution has obtained recognition under the Policy. The other option is that the total amount of investments in securities in Mainland China by a single fund shall not exceed the fixed ceiling of 40% permanently. The FSC also amended some indicators with regard to “increasing the scale of domestic assets under management” to encourage offshore funds to follow the policy.
2.Amendments to the Incentive Policy for Onshore Fund to provide an incentive for securities investment trust enterprises to participate in the policy
In order to encourage securities investment trust enterprises (“SITEs”) to improve their personnel capabilities and techniques of asset management, increase their asset sizes and help them expand business on the international market, the FSC announced the amendments of the aforementioned Policy and FAQ on February 27, 2019. In addition to the existing preferential measures, the SITEs meeting specific criteria set by the Policy are also entitled to two basic preferential measures. One is that the SITE is allowed to apply for issuance of securities investment trust funds that are not subject to the regulatory limits for the types, scope and percentage of their securities investment. The other is that the SITE can apply for issuance of ETF feeder funds which invest in the ETFs already managed by the SITE and are not subject to the ETFs with domestic component securities. The FSC also relaxed the requirements for several assessment indicators as an incentive for SITEs to participate in the Policy.