Reference Material for 2014 Lunar New Year Press Conference
2014-02-24
＊The Article has been written in both Chinese and in English. In case of any discrepancy between two versions, the Chinese version shall prevail.
I. Preface
The FSC implements any measures based on the principle of "stability, innovation, and liberalization" as it works to achieve its policy goals of maintaining financial stability and spurring the growth of Taiwan''s financial markets. In order to bring about sustainable development of the financial industry, we have convened many liaison meetings with industry representatives to engage in wide-ranging discussions on how to help financial institutions develop innovative new high-quality financial products, and how to further deregulate in order to spur the innovation of new financial products and services, and to expand the business scope of financial services firms. Striking a proper balance between supervision and industry development, the FSC will continue to develop and implement financial policies and measures designed to facilitate the emergence of a more sophisticated financial industry and further development of the financial sector as well as the economy as a whole.
II. Recent achievements
A. Broader business scope, more competitive financial institutions
(1) Development of RMB business
1. On 6 February 2013 we began allowing domestic banks to accept RMB deposits, make RMB loans, and provide RMB remittance services. As of 30 November 2013, total RMB deposits stood at over RMB 150 billion. We also now allow securities firms, investment trust and investment consulting firms, and insurers to engage in RMB-denominated products. To date, we have seen the issuance of 13 Formosa Bonds and the launch of 15 RMB investment funds. In addition, 15 life insurers now sell unit-linked policies with payments settled in RMB.
2. In order to provide the people of Taiwan with a greater range of insurance products and asset allocation options to choose from, as of 19 December 2013, the FSC now allows insurers to sell non unit-linked insurance products for which payments are settled in RMB (often referred to as "traditional RMB products").
(2) Integrated securities firms get green light to establish offshore securities units (OSUs) to conduct offshore securities business
In order to make Taiwan''s securities firms more internationally competitive, the FSC amended the "Offshore Banking Act" to allow any integrated securities firm that is of a certain minimum size and is financially sound to apply for approval to establish an OSU to conduct offshore securities business. In addition, the FSC recently amended the "Regulation for the Implementation of the Offshore Banking Act" and issued the "Regulations Governing Offshore Securities Units" in order to facilitate the efforts of securities firms to conduct international securities business and comply with applicable regulations. The FSC will actively provide firms with guidance to help them get this type of business up and running.
(3) Active support for development of domestic asset management business
The FSC has adopted a series of measures to improve the asset management expertise of Taiwanese investment trust and investment consulting firms. Steps taken include the following:
1. The FSC has eased the restriction against an investment trust fund manager, discretionary investment manager, or an analyst working for a securities investment trust and consulting firm concurrently holding either of the other two positions.
2. The FSC has amended the "Regulations Governing Securities Investment Trust Funds" to relax restrictions on fund management. Key provisions include the following:
1A fund is now allowed to make short-term loans.
2Restrictions regarding the maximum (or minimum) amount that a balanced fund is allowed (or required) to invest in stocks have been relaxed.
3A bond fund is now allowed to invest in convertible corporate bonds, corporate bonds with warrants, and exchangeable corporate bonds.
4The procedures and eligibility requirements for fund mergers have been simplified.
(4) Greater flexibility in business operations of securities and futures firms
1. In order to satisfy the demand of institutional investors in Taiwan for offshore fixed income products, the FSC now allows financial institutions to concurrently conduct business activities that involve brokered trading in foreign bonds, and securities firms (including those operated concurrently by a bank) which broker trades in foreign bonds are no longer limited to operating in the secondary market.
2. To afford securities firms and futures commission merchants （FCM）greater flexibility in their allocation of funds, the FSC has amended rules to exempt them from a prohibition against accepting (in connection with the conduct of securities lending business) foreign-currency collateral in excess of 30% of net worth. Securities firms are now additionally allowed to trade in foreign derivatives for non-hedge purposes, and enterprises exclusively engaged in FCM business are now allowed to hold domestic exchange- and OTC-listed securities (including Formosa Bonds).
3. The FSC has amended the "Regulations Governing Securities Firms" to make Taiwan''s securities firms more competitive. Securities firms are now allowed to trade in foreign derivatives for non-hedge purposes. Provisions governing proprietary trading have been amended to subject the trading procedures to a securities firm''s internal controls. And to reduce the reliance of laws and regulations on credit ratings, provisions relating to credit ratings have been deleted and replaced with requirements concerning a securities firm''s financial and operational conditions.
4. In order to enable securities firms, futures commission merchants, and leverage transaction merchants to make more flexible use of associated persons, thereby making our securities firms and futures commission merchants more competitive, the FSC has eliminated the provision that formerly required that associated persons at securities firms and futures commission merchants must be full-time employees. Instead the regulations now merely state the negative list that an individual is not allowed to simultaneously serve as an associated person at both a securities firm and a futures commission merchant.
(5) Insurers encouraged to invest in infrastructure projects
The FSC and the Ministry of Finance are collaborating to establish an appropriate way for insurers to invest in BOT infrastructure projects, with a distinction made between project management and project financing. Specialized entities will take charge of project management, while new channels have been created to allow for insurers to take part in project financing. This approach is intended to make insurers more interested in allocating their capital to infrastructure projects.
B. Larger capital markets
(1) In order to provide a channel for RMB funds in Taiwan to be repatriated to the mainland, and to expand participation in the market for Formosa Bonds, the FSC now allows mainland Chinese companies to issue RMB bonds in Taiwan. Three types of issuers (qualified mainland banks and their offshore subsidiaries and branches; the mainland branches of Taiwanese financial institutions; and firms in the mainland that are controlled by a company listed in Taiwan and are included in the controlling company''s consolidated financial reports) are allowed to issue straight corporate bonds in Taiwan, provided that the bonds may only be sold to qualified institutional investors. The FSC very carefully examines and considers the reasonableness of yields on Formosa Bonds to be issued by mainland companies in order to safeguard investor interests.
(2) To facilitate the development of newly established companies, the FSC now allows for the flexible setting of par values for company shares. The old requirement that all shares be issued at a par value of NT$10 per share has been eliminated, and securities industry SROs have been asked to make related revisions to their listing rules, trading systems, and supervisory measures. In addition, the FSC has also stepped up its measures to educate issuers, investors, securities firms, and other market participants.
C. Strengthening financial supervision to ensure financial stability
(1) Measures to strengthen risk-bearing capacity of financial services firms:
1. The FSC has amended the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans" to raise the minimum Tier 1 capital provision against bad debts from 0.5% to 1%. Banks must achieve compliance with this rule by the end of 2014.
2. In order to reasonably reflect the quality of insurers'' loan assets in premium rates, thereby strengthening their capability to weather future adverse economic conditions, and to improve insurers'' ability to implement risk-based asset management capability, the FSC on 16 October 2013 amended the "Regulations for Handling Assessment of Assets, Loans Overdue, Receivable on Demand and Bad Debts by Insurance Enterprises." The amended regulations added provisions setting the criteria that insurers are required to set aside against Class 1 to Class 5 loan assets. The purpose is to improve the ability of insurers to withstand economic downturns.
(2) In order to strengthen the anti-money laundering systems of financial institutions, and to prepare for the Asia/Pacific Group on Money Laundering''s 2014 Follow-up Report to the Mutual Evaluation Report of Chinese Taipei, the FSC, after conducting a study of international standards and legislation adopted in different countries throughout the world, has issued several guidelines for anti-money laundering and combating the financing of terrorism. These guidelines require financial services firms to confirm customer identity, keep transaction records, etc.
(3) Tighter supervision of insurers
1. In order to respond to interest rate movements and to maintain the soundness of life insurers'' policy reserve provisions, the FSC has announced the valuation interest rates that apply as of 1 January 2014 to new contracts denominated in various different currencies (NT dollar; US dollar; Australian dollar; euro) as well as new RMB-denominated policies.
2. In order to ensure that insurers are managed in a safe and sound manner, the FSC is urging insurers to review the interest-sensitive annuity insurance and universal insurance policies that they sell to be sure that there is no loading deficit, which is not allowed. In addition, there is a high degree of correlation between lapse ratios and the length of the surrender penalty period, therefore the FSC, in order to ensure that this type of policy is sold properly, has issued new rules to govern the charging of penalties for early surrender of interest-sensitive annuity insurance and universal insurance policies. The new rules took effect on 1 January 2014.
3. Now that a construction performance guarantee system for pre-construction homes has been adopted, investments by insurers in real estate investment trusts (REITs) linked to pre-construction homes have become much riskier. In response, the FSC on 29 August 2013 issued a directive barring insurers from buying shares in REITs linked to this type of home.
(4) In order to strengthen corporate governance in Taiwan, all exchange- and OTC-listed companies are now required to establish independent directors. Financial services firms and any listed company with paid-in capital of at least NT$10 billion will have to have an audit committee by 1 January 2015, while any listed company with paid-in capital of between NT$2 billion and NT$10 billion will have to have an audit committee by 1 January 2017.
(5) Improved trading systems and more effective trading
1. Stock market stimulus plan
1In order to afford securities dealers greater flexibility in their operations, the Taiwan Stock Exchange now allows securities dealers to give quotes for the purchase (or sale) of securities at the limit-up (or limit-down) price.
2 Investors were formerly allowed to short sell only about 150 listed stocks at below the previous trading day''s closing price, but they are now allowed to do so with any securities that are eligible for margin purchases and short sales. This change has been made to help investors execute strategic and hedge trades.
3As of 6 January 2014, investors are now allowed to execute day trades (where the purchase precedes the sale) in a total of 200 different stocks (the component stocks of the TWSE Taiwan 50 Index, the FTSE TWSE Taiwan Mid-Cap 100 Index, and the GreTai 50 Index).
2. In order to allow Taiwan''s futures market to handle large trades in a manner that better meet the needs of traders, as of 2 December 2013, the FSC now allows futures market negotiated block trading.
(6) The FSC is overseeing the efforts of the Taiwan Stock Exchange and the GreTai Securities Market to develop measures for stronger supervision of backdoor listings. Newly adopted rules provide that if a listed company has fewer shares in circulation than a certain minimum, its shares will be subject to an altered trading method or a trading suspension, or will be delisted. In addition, when a listed company simultaneously undergoes a change in managerial control and a change in its business scope: (a) trading in its shares will be suspended; (b) the company will be instructed to disclose related information; and (c) the company will have to solve any problems in its internal systems within a prescribed time, and trading in its shares will not be resumed until it does so.
D. Bringing Taiwan''s financial markets more closely in line with international practices
(1) Encouraging financial institutions to build up presence in Asia:
The Asian Development Bank estimates that the Asian economy accounted for about 27% of global GDP in 2010, and expects this share to surpass 50% by 2050. This shows that Asian markets have tremendous development potential. In response, the FSC has adopted plans to strengthen international supervisory cooperation, further deregulate, train personnel to better handle international business, and set up a database to support efforts to establish overseas business locations. These measures are designed to help banks actively establish a presence in overseas markets and seize more business opportunities.
(2) In order to conform with IAS 40 Investment Property, which permits entities to choose either a fair value model or a cost model for measurement of investment property, the FSC permits companies, subsequent to initial recognition, to measure investment property at fair value. The FSC has also adopted various coordinated measures, including the following: (a) rules governing the fair value method and related parameters; (b) standards for outsourced appraisals; and (c) qualification requirements for appraisers.
(3) The FSC hosted the 2013 International Association of Insurance Supervisors (IAIS) Committee Meetings and Annual Conference in Taipei. The event was attended 625 participants (including insurance supervisory officials, industry representatives, and experts) from 118 nations. The conference helped participants develop a better understanding of different countries'' insurance supervisory systems and important measures they have taken.
(4) In November 2013, the FSC and Japan signed an MOU on financial supervisory cooperation in the banking, securities & futures, and insurance industries. We have now signed financial supervisory MOUs and exchanges of letters with 48 authorities from key countries in the Americas, Europe, and Asia.
E. Fully satisfy demand for diversified financial services
(1) Support development of e-commerce payment system
1. The FSC has allowed banks to collaborate with third-party payment service providers in a relationship under which banks open stored-value payment accounts for the members of third-party payment service providers. The members deposit funds into such accounts so that the money can be used later to pay for online transactions.
2. The FSC now allows banks to provide collection and payment services for online transactions. Also, a bank that provides collection and payment services for an acquiring institution is also allowed to simultaneously act as a participating merchant to help small online merchants accept payments by credit card.
(2) The FSC encourages financial institutions to set up branch units in underserved areas. Therefore, when a financial institution applies for permission to set up a branch unit in an area where the establishment will help to narrow the gap between the availability of urban and rural financial services, restrictions on the number of service locations and what time that an institution can apply for will not apply.
(3) The FSC has granted approval for the Financial Information Service Co. to establish a Foreign Currency Settlement Platform to provide domestic interbank clearing and settlement of US dollars. And on 30 September 2013, the platform added the capability to handle domestic and cross-border (not limited to cross-strait) RMB clearing and settlement services. It is now possible to make RMB remittances in Taiwan without having to route the funds via a foreign country, and the full amount of such remittances is received on the same day.
F. FSC strengthens financial consumer safeguards
(1) In order to safeguard the interests of the economically disadvantaged, actively encourage insurers to launch micro-insurance products as a form of commercial insurance, the FSC has approved the launch of 17 micro-insurance products providing 52,000 persons a combined total of NT$15.5 billion in coverage.
(2) In order to ensure more reasonably priced insurance premiums, and to include drunken driving incidents among the factors for raising premium rates, the FSC has added such incidents to the Compulsory Automobile Liability Insurance Tariff as a factor for raising rates on a defined class of driver. For any driver who has been found driving under the influence of alcohol in the previous year, the number of such incidents is multiplied by a fixed dollar amount, with no upper limit set on the amount (the fixed dollar amount is NT$2,100). This change is scheduled for implementation from 1 March 2014.
(3) FSC expands range of companies subject to electronic voting requirement
As of 1 January 2014, an exchange- or OTC-listed company with capital of NT$5 billion or more and at least 10,000 shareholders must provide the option of electronic voting at shareholders meetings. In addition, in order to encourage companies to promote electronic voting by adopting a candidate nomination system, when a company meeting the above description and having capital of between NT$5 billion and NT$10 billion is scheduled to re-elect its directors and/or supervisors at its next shareholders meeting in 2014 and is also going to amend its articles of incorporation or adopt a candidate nomination system at that meeting, it will be allowed to postpone electronic voting until the next shareholders meeting.
(4) As of 31 December 2013, the Financial Ombudsman Institution had handled 4,194 complaints, of which 3,878 had been forwarded to a financial services firm, following which the cases were closed. About 40% of the cases were closed through a settlement agreement or by doing as the consumer had requested. In addition, another 2,264 complaints led to ombudsman cases, of which 1,951 cases were closed during the year, and 1,839 cases (94.26%) were closed within three months. Among the closed cases, 1,099 were closed because: (a) they withdrawn before conclusion of the ombudsman procedure; (b) they were resolved through a successful mediation procedure; or (c) they were resolved through a successful ombudsman procedure (case resolution rate: 56.33%).
III. Important undertakings
A. Encourage more bank lending to SMEs
In order to help small and medium enterprises (SMEs) gain access to needed working capital, the FSC continues to implement the Program to Encourage Lending by Domestic Banks to Small and Medium Enterprises. 2014 constitutes year number 9 of the program. The FSC has set a target of raising the balance of SME loans by domestic banks in 2014 by NT$240 billion, and incentive measures have been adopted to encourage domestic banks to lend more to SMEs, always with the precondition that a proper balance must be struck between the need for economic development and the requirement for banks to manage their risks.
B. Creating business opportunities through deregulation
(1) Participation by financial services firms in Taiwan''s free economic pilot zones (FEPZs)
The FSC completed a "Plan to Include Financial Institutions in the Free Economic Pilot Zone Project" and submitted it to the Executive Yuan, which approved it on 19 November 2013. The principles of the plan are as follows: (a) adoption of a "virtual pilot zone" concept that allows financial services firms to have a virtual presence (rather than a brick-and-mortar presence) in the zones; (b) deregulation; (c) extending the application to cover all of Taiwan; and (d) keeping talent and assets inside the country. The FSC will allow financial services firms to provide a wider range of products and services. Deregulatory measures under the plan include the following: (a) easing of restrictions on the range of trust products that offshore banking units (OBUs) are allowed to sell; (b) easing of restrictions on who may purchase derivatives from OBUs, and allowing OBUs to sell a broader range of investment products; (c) allowing OBUs to sell new types of foreign exchange products that do not involve the NT dollar without going through an approval process, so long as the product in question does not appear on the FSC''s negative list; and (d) banks are allowed to engage in the brokerage of foreign bonds as a sideline business.
(2) Simplification of product review procedures for offshore structured products, and easing of restrictions on the range of underlying assets to which they can be linked
For offshore structured products that are sold only to qualified institutional investors, the FSC allows the products to be linked to: (1) securities issued overseas by Taiwanese companies; (2) beneficial certificates issued overseas by Taiwanese securities investment trust enterprises; and (3) products and contracts that involve mainland China. Products of this type need not undergo a pre-sale review by the broker''s or sub-distributor''s product review team. This approach affords qualified institutional investors access to a broader range of offshore structured products, and satisfies the need of customers for greater flexibility in their asset management.
(3) Further deregulatory measures currently under study
The FSC is comparing the degree of financial market opening in Taiwan, Hong Kong, and Singapore in an effort to identify further market opening measures that could make our markets more competitive. Implementation of feasible measures will be given top priority.
C. Financial support for innovative industries
In order to help innovative enterprises gain timely access to the funds they need for development, the FSC has adopted a Program for Financial Support of Innovative Industries, which puts forward the following four approaches to the issue: education and training; access to funding; an advisory platform; and coordinated measures. The key focal points of implementation efforts are the following:
(1) Education and training: The FSC is going to ask financial training organizations to develop related curricula, and will ask the ROC Bankers Association to encourage its member institutions to focus more of their research efforts on matters of interest to innovative enterprises.
(2) Access to funding: The FSC will actively study the possible adoption of legal provisions governing investments by life insurers in innovative enterprises, and will raise (from 80% to 90%) the maximum guarantee that the Small and Medium Enterprise Credit Guarantee Fund of Taiwan is allowed to provide for loans to innovative enterprises.
(3) Advisory platform: The ROC Bankers Association, ROC Life Insurance Association, Taiwan Securities Association, and the Taiwan Venture Capital Association have joined forces to establish an integrated services platform to provide free consulting services to innovative enterprises that are in need of funds.
(4) Coordinated measures: The FSC''s Program to Incentivize Lending by Domestic Banks to Innovative Enterprises took effect on 1 January 2014. The program''s target is to raise the outstanding balance of loans by domestic banks to innovative enterprises to NT$360 billion within three years. In addition, in order to ensure that the intangible assets of innovative enterprises are fairly valued, the FSC has asked the Taiwan Financial Asset Service Corporation to provide asset appraisal services for innovative enterprises.
D. Encouragement for financial services firms to support development of e-commerce
E-commerce will increasingly enter the economic mainstream as time goes by, which is why the FSC allows the operation of online stored-value services. In the near future, the FSC will go one step further by allowing banks to operate two-way payment services for cross-strait online e-commerce. In order to further facilitate the development of domestic e-commerce in Taiwan, the FSC is going to actively study possible measures to spur financial services firms to provide wide-ranging support for e-commerce.
E. Steps to spur healthy development of Taiwan''s capital markets
(1) Help micro-businesses and innovative enterprises
On 3 January 2014, the GreTai Securities Market (GTSM) launched its Go Incubation Board for Startup and Acceleration Firms (GISA), Non-public micro-businesses with innovative ideas can use the GISA board to raise needed capital. The GTSM will continue providing related advisory assistance to help innovative micro-businesses to list for trading on the GISA board. In addition to spurring close cooperation for direct and indirect financing of SMEs and micro-businesses, the GISA board can also help innovative micro-businesses to gradually grow and internationalize, thereby injecting greater vitality into Taiwan''s capital markets. The preliminary expectation of the GTSM is that some 70 enterprises will list shares on the GISA board in its first year.
(2) Blueprint for promotion of corporate governance
In order to expedite measures to promote corporate governance, the FSC is working on a corporate governance promotion blueprint to guide future policymaking. The blueprint includes five main focal points: (a) shaping corporate governance; (b) promoting shareholder activism; (c) strengthening the role of the board of directors; (d) disclosure of material corporate governance information; and (e) strengthening legislative action. More complete legislation, corporate self-regulation, and market discipline will be the three forces that support active efforts by the FSC over the coming five years to promote and shape the culture of corporate governance, help corporations achieve healthy development, and bolster confidence in the markets.
In order to help investors and corporate management better understand the results of efforts to implement corporate governance, the FSC and the Taiwan Stock Exchange Corporate Governance Center are planning to organize an assessment of corporate governance in 2014 at all companies listed on the Taiwan Stock Exchange and the GreTai Securities Market. By comparing among companies, the center intends to spur them to take corporate governance more seriously, thereby further shaping a culture of corporate governance in Taiwan. It is also going to require public companies to disclose information pertaining to corporate social responsibility and ethical corporate management. Also, the various public-sector funds and financial institutions subject to FSC supervision will be asked to: (a) factor the quality of corporate governance into the standards upon which stock investment decisions are based; (b) disclose the content of these standards; (c) track the corporate governance performance of companies in which they have invested; and (d) disclose the findings of these tracking efforts.
(3) Continue to expand the business scope of securities and futures firms and facilitate their efforts develop new financial products
1. The FSC is studying the possibility of allowing futures trust enterprises to offer and issue exchange-traded funds.
2. The FSC is studying the possibility of allowing futures commission merchants to accept discretionary trading orders from professional investors.
F. Measures to spur healthy operation and development of insurers
(1) Possible "Insurance Act" amendment to strengthen supervision of insurers
In order to strengthen supervision of insurers, the FSC has studied possible amendments to the "Insurance Act" to introduce a transition mechanism. Under this mechanism, when a troubled insurer faces imminent conservatorship or closure, an interim insurer would steps to take over the company''s operations. While the interim insurer is in charge, the company would sell no new policies, but would continue to settle claims on existing policies. An interim insurer would not be subject to "Insurance Act" restrictions on the use of enterprise funds, which would free it up to actively support efforts to deal with the troubled insurer.
(2) Review of rules governing use by insurers of enterprise funds
1. Measures to ensure proper exercise of shareholder rights by insurers
In order to prevent insurance companies from using policyholder funds to influence or intervene in the management of listed companies, the FSC is studying the possibility of restricting how insurers exercise their voting rights in director and supervisor elections at companies in which they have invested.
2. The FSC is collecting information both at home and abroad on situations where an insurer has obtained control of a bank, securities firm, or futures firm. This information is being collected in preparation to study the possibility of allowing insurers to use their enterprise funds for offshore M&A deals. This would afford insurers a greater range of choice in their capital allocations.
(3) Measures to guide proper development of insurers
In order to prevent insurers from selling insurance products that are functionally equivalent to certificates of deposit, which would subject the insurers to risk, the FSC is planning to take steps to guide insurers back toward the sale of proper products.
G. Promotion of further financial industry consolidation
The FSC has well-developed M&A legislation which requires that M&A deals involving financial institutions must be fair, open, and transparent. We will continue observing the following three principles as we work to actively promote financial industry consolidation: (1) M&A deals must respect market mechanisms; (2) M&A deals must be carried out in compliance with the law; and (3) M&A deals must serve the greater public good. The FSC will continue to review applicable laws and regulations, and amend them when and as appropriate.
Attachment: Key Measures to be Implemented by the FSC in 2014
Measure | Description | ||
1 | 1 Jan 2014 | Ease restrictions on who may purchase derivatives from OBUs, and allow OBUs to sell a broader range of investment products. | 1. The OBUs of banks whose financial and business operations meet certain conditions will be allowed to sell new types of foreign exchange products without going through a prior approval process; they can start selling first and file a notice with the FSC after the fact. 2. OBUs can sell any type of derivative except credit derivatives. 3. An OBU is no longer required to meet a minimum principal protection percentage for the structured notes it sells. Also, such notes may now be linked to offshore private equity funds, and to more than one class of asset |
2 | 1 Jan 2014 | Allow OBUs to sell new types of non-NT dollar foreign exchange products without going through an approval process, so long as the product in question does not appear on the FSC''s negative list. | The OBUs of banks whose financial and business operations meet certain conditions will be allowed to sell this type of foreign exchange product without going through a prior approval process; they can start selling first and file a notice with the FSC after the fact. |
3 | 1 Jan 2014 | Better financial services for SMEs | 1. The FSC will continue to implement the Program to Encourage Lending by Domestic Banks to Small and Medium Enterprises. 2014 constitutes year number 9 of the program. The FSC has set a target of raising the balance of SME loans by domestic banks in 2014 by NT$240 billion, and incentive measures have been adopted to encourage domestic banks to lend more to SMEs. 2. The FSC will encourage banks to set up SME lending consultation windows at selected branches that make a lot of SME loans, so that such branches can provide more efficient service to SMEs in their nearby area. |
4 | 1 Jan 2014 | Eliminate requirement that all shares had to be issued at a par value of NT$10 per share. | 1. To encourage the development of innovative enterprises, the FSC has amended the "Regulations Governing the Administration of Shareholder Services of Public Companies" to eliminate the provision that required that all shares be issued at the same par value. Par values may now be set flexibly. 2. Securities industry SROs have coordinated with this amendment by amending their listing rules, trading systems, and supervisory measures. In addition, the FSC has also stepped up its measures to educate issuers, investors, securities firms, and other market participants. |
5 | 1 Jan 2014 | Expand range of companies subject to electronic voting requirement. | 1. As of 1 January 2014, an exchange- or OTC-listed company with capital of NT$5 billion or more and at least 10,000 shareholders must provide the option of electronic voting at shareholders meetings. 2. In addition, in order to encourage companies to promote electronic voting by adopting a candidate nomination system, when a company meeting the above description that has capital of between NT$5 billion and NT$10 billion is scheduled to re-elect its directors and/or supervisors at its next shareholders meeting in 2014 and is also going to amend its articles of incorporation or adopt a candidate nomination system at that meeting, it will be allowed to postpone electronic voting until the next shareholders meeting after that in order to make it easier for the company to amend its articles of incorporation or adopt a candidate nomination system. |
6 | 1 Jan 2014 | Reduce valuation interest rates that apply in 2014 to certain types of new life insurance contracts. | The FSC has announced the valuation interest rates that apply as of 1 January 2014 to new contracts denominated in various different currencies. For new euro-denominated insurance policies with a premium paying period of six years or more, the valuation interest rate has been reduced by 0.5 to 0.75 percentage points. For new insurance policies denominated in various foreign currencies with a premium paying period of three years or less, the valuation interest rate has been reduced to 0.75 percentage points less than the rate applying to the corresponding duration of a policy of the same type with a premium paying period of six years or more. These changes have been made: in response to interest rate movements and global economic conditions; to maintain the soundness of life insurers'' policy reserve provisions; in light of the solvency of Taiwan''s life insurers; and to encourage the sale of long-term insurance products that will increase policyholders'' insurance protection. |
7 | 1 Jan 2014 | Lengthen the surrender penalty period for interest- sensitive annuity insurance and universal insurance policies. | In order to ensure that insurers do not engage in improper practices in the sale of universal insurance policies and interest-sensitive deferred annuities, the FSC has lengthened the surrender penalty period for these types of products. Also, to coordinate with adjustments to the valuation interest rates that apply to the various foreign currency policies sold by life insurers, and to ensure that such products serve the purpose for which they were originally intended, the FSC has adopted a new interest rate testing benchmark that will be used to analyze the interest rates for life insurance products. The FSC has amended the "Directions for the Review of Life Insurance Products" in order to prompt insurers to price their products carefully. |
8 | 6 Jan 2014 | Allow investors to execute day trades where the purchase precedes the sale. | 1. In order to establish a more fully developed trading system, as of 6 January 2014, investors are now allowed to execute day trades where the purchase precedes the sale. 2. This change will be phased in gradually. During the current phase one, such day trades may involve a total of 200 different stocks (the component stocks of the TWSE Taiwan 50 Index, the FTSE TWSE Taiwan Mid-Cap 100 Index, and the GreTai 50 Index). The situation will be monitored during phase one to see whether the change proves beneficial and what the associated risks may be. For phase two, the FSC will consider whether it would be appropriate to allow this type of day trading in a wider range of instruments. |
9 | 31 Jan 2014 | Allow credit co-ops to lend to non-member SMEs and non-profits. | In order to help SMEs and non-profit entities obtain financing from credit cooperatives where they are not members, and to expand the business scope of credit cooperatives, the FSC has amended the "Standards for Transaction Limits Between Credit Cooperatives and Non-members" to allow credit cooperatives to lend to these types of non-member borrowers. |
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2014-09-12