Important Measure October 2024
2024-12-24
1. Securities Firms Allowed to Accept Orders from Professional Investors for Trading of Overseas Virtual Asset ETFs
To provide investors with diverse product options and enhance the momentum of sub-brokerage business for Taiwanese securities firms, while also considering the relatively high investment risk associated with overseas virtual asset ETFs, the Financial Supervisory Commission (FSC) issued Order No. Financial-Supervisory-Securities-Firms- 1130353825 1 October 2024. The order allows securities firms to accept orders from professional investors for trading of overseas virtual asset ETFs. It also introduces supporting measures including requiring securities firms to assess whether the principal has professional knowledge and investment experience in virtual assets and related products, to ascertain whether the product is suitable for sub-brokerage trading by the principal. Unless the principal is a professional institutional investor, a securities firm, prior to a principal’s initial purchase, must provide product information and have the principal sign a risk disclosure statement. Securities firms will also be required to regularly conduct related education and training for their associated persons.
2. Regulations Governing Securities Investment Consulting Enterprises Amended to Enhance the Legal Underpinnings and Strengthen the Supervision of Robo-Advisor Services
The number of firms providing securities investment consulting services with automated tools (“robo-advisor services”) and the cumulative asset size under management and cumulative number of customers of such services have all surged in recent times. Considering this development, to enhance the legal underpinnings and strengthen the supervision of robo-advisor services, and to protect the rights and interests of investors, the FSC issued amendments to the Regulations Governing Securities Investment Consulting Enterprises on 25 October 2024. The amendments introduce important self-regulatory provisions to the Regulations, and expressly set out financial and business conditions for the service providers and requirements with respect to their internal management systems or internal control systems and external supervision. Meanwhile, the amendments also relax restrictions on banks that concurrently operate trust enterprises, by allowing them to use their capital adequacy status to meet the financial conditions for operating investment consulting services relating to foreign securities and providing robo-advisor services.
3. FSC Order Introduces New Types of Business Approved by the Competent Authority for Operation by SITEs and SICEs Under Articles 3(3)(3) and 4(3)(3) of the Securities Investment Trust and Consulting Act
To allow securities investment trust enterprises (SITEs) and securities investment consulting enterprises (SICEs) to cooperate with banks and securities firms in developing sales and consulting services for offshore funds that do not have the nature of securities investment trust funds, the FSC issued an order on 25 October 2024 introducing new types of business that are approved by the competent authority for operation by SITEs and SICEs under Articles 3(3)(3) and 4(3)(3) of the Securities Investment Trust and Consulting Act. The order relaxes the scope of the counterparties of, and types of, services that SITEs and SICEs are allowed to provide. Also, to increase operational flexibility for domestic and overseas enterprises, the order lifts the original restriction that foreign asset management institutions or their designated institutions could appoint only a single qualified financial institution in Taiwan to sell their fund products that do not have the nature of a securities investment trust fund. Under the order, they now may make such appointments on a fund-by-fund basis.
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Update:
2025-02-11