萬國法律事務所

The Financial Supervisory Commission, Executive Yuan (FSC) has decided to allow securities firms to conduct in trust business in the operation of wealth management. FSC has also increased the investment objects for securities firms to include objects such as listed local company’s shares and futures.

Currently, the wealth management of securities firms is based upon the client’s appointment and the investment objects is limited to instruments such as funds, local structured instruments, and etc. The “appointment-based” model of the securities firms is substantially different from the “trust-based” model of the banks, while the taxation of the former is less beneficial and the restriction on the investment object is much stricter.

As such, with the recent decision of FSC, securities firms will be able to deal with wealth management through trusts and this substantially widens the scope of investment objects to include deposits savings, government bonds, listed local company’s share, futures, derivatives, foreign exchange investment, securities borrowing and lending business and etc. This will in future increase the competition among banks, insurance companies and securities firms in the business of wealth management.

However, during the initial period, the type of business that may be conducted by the securities firms in operating wealth management through trust is limited to “specific single management”, “specific collective management” and “single management, of the operation scope or method determined by client.” Other business types will be subsequently released once research on the related supplementary measures is completed.