萬國法律事務所

The Chairman of Taiwan’s Financial Supervisory Commission, Ming-Chung Tseng, announced to the press that one of the Commission’s research projects outsourced to the Taipei Finance Foundation has developed into a new framework for various investment laws, consolidating laws including the Securities Investment Trust and Consulting Act, the Future’s Trading Act, the Trust Enterprise Act, and certain clauses of the Real Estate Securitization Act.

The new Act features provisions that break the barriers which exist among different investment businesses and products and which liberalize different investment businesses so that multiple types of investment combinations, that were previously only allowed to be handled by specific businesses in its field, can now be handled by other businesses. Moreover, as these four major investment laws are consolidated, the asset management business will be regulated under a single legislative framework, thus decreasing the cost related to legal compliance and this consolidation will also prevent rent-seeking due to a fragmented system of laws.

In the future, companies will be allowed to engage in securities investment trusts and consulting, future’s trading, and/or trust enterprises as soon as they are licensed as an “Asset Management Company.” Under the new Act, consumers can expect to have more investment opportunities to choose from in a more diversified investment market, and current problems such as the FSC’s difficulty in regulating and categorizing new financial products meshing features of securities and future’s trading, such as the “Gold ETF,” will also be resolved.

Although the administration emphasizes the strengths of the new Act, doubts on whether the banking industry will support the new act exist, as current laws allows only the industry to operate in the Trust enterprise business. On the other hand, the Securities Business Association is lobbying to have investment trusts and issue private equities funds permitted under the new Act. The FSC is not inclined to accept the proposal, however, due to conflict-of-interest concerns in connection with the securities business and investment trusts.

In response to different voices, Chairman Tseng expressed that as the new Act will break the current balance among various players, the Act incorporates a wide and complex range of laws. Legislation will not take place without first looking into the feasibility of the research project conclusions, and the FSC will first seek a consensus from within the industry. Nonetheless, Tseng emphasized that with a savings rate of Taiwanese as high as 27-28%, the amount of domestic funds reaches more than 2 trillion and overseas funds as much as 3.3 trillion, there is a plenty of room for the investment business to develop further in Taiwan.