Taiwan’s financial regulator allows professional investors to invest in digital asset ETFs
The FSC has restricted access to virtual asset ETFs to professional institutional investors, requiring security firms to establish a “virtual asset ETF compliance system.”
Taiwan's financial regulator is allowing professional investors to invest in “foreign virtual asset” exchange-traded funds (ETFs) through a re-trust service.
In an announcement, the Financial Supervisory Commission (FSC) said the move would provide investors with “diversified product choices and enhance the process of re-entrusting the business of Chinese securities companies.”
Due to the high risks associated with crypto-related ETFs, the FSC has restricted this to professional investors. These include professional institutional investors, high net worth professionals and high net worth clients.
In addition, the FSC announced that security companies must establish a virtual asset ETF suitability system that must be approved by the board of directors to determine their professional knowledge of virtual assets before investing in ETFs.
Before a customer makes the first purchase, the security companies must provide product information related to the ETF. The security companies provide regular training and education on virtual assets.
According to the FSC, it will “continue to focus on the management of re-entrusted businesses by securities companies and to improve the relevant regulations to ensure the rights and interests of investors and enhance the competitiveness of securities companies”.
A careful approach
Taiwan has traditionally taken a cautious stance towards the cryptocurrency market.
However, the financial regulator has seen a shift in the industry over the past year. Last September, the FSC issued guidelines for crypto exchanges with the aim of enhancing crypto regulation.
Then, last October, the Taiwanese government introduced the Virtual Asset Management Bill.
Focused on consumer protection, regulatory obligations and industry self-regulation, the bill provides guidance for virtual asset service providers (VASPs) as the industry evolves.
