To protect senior citizens from financial exploitation, Taiwan's Financial Supervisory Commission (FSC, 金融監督管理委員會) announced on April 8 2022 that it has invited the financial industry to create new rules to enhance protective measures for senior financial consumers as Taiwan becomes a super-aged society. The new rules will take effect from October 1 2022.
A super-aged society is one in which at least 20% of the population is 65 years old or older. According to the statistics from National Development Council (國家發展委員會), Taiwan will become a super-aged society (超高齡社會) in 2025.. In response, the FSC is requiring that the Taiwan Securities Association (中華民國證券商業同業公會), Securities Investment Trust & Consulting Association (中華民國證券投資信託暨顧問商業同業公會), and National Futures Association (中華民國期貨業商業同業公會) establish self-regulatory rules ("New Rules") with which securities and futures sector companies should comply. According to the FSC's guidance, the New Rules must also be incorporated into securities and futures sector companies' internal control structures.
Pursuant to the New Rules, securities and futures sector companies ("Companies") must implement the following measures to enhance financial consumer protection for older consumers:
- Know Your Customer (KYC) procedures: Companies shall design appropriate risk profile assessment mechanisms for senior citizens that take into account their risk characteristics.
- Know Your Product (KYP) procedures: Companies must consider factors with high impact on senior citizens that fully reflect the product risk
- Appropriateness assessments: Companies must properly assess and explain the appropriateness of promoted financial products and the reasons for the promotion to ensure appropriateness of the products.
- When providing financial services, Companies must enhance the readability of promotional and contractual documents.
- Upon noticing a senior citizen's suspicious behavior, Companies may ask questions concerning the senior citizen's wellbeing or adopt other responsive measures.
- Companies must establish transaction reviews or confirmation mechanisms when selling high-risk products to senior citizens and transaction monitoring and enhanced inspection mechanisms for senior citizens.
In consideration of the fact that Companies will need time to amend their internal regulations and information systems after the New Rules are released, the FSC has granted a six-month grace period under which the New Rules will take effect from October 1 2022.
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