By Asian Investor | Liz Mak | 28 August 2008 for full articl click here
Excerpt: Under the proposed rules, Taiwanese banks will no longer have a monopoly on the $232 billion trust industry.
August 2008 has been a truly auspicious month for the Taiwanese fund management scene. Never mind that global markets continue to slide.
In yet another move towards deregulation, Taiwan’s Financial Supervisory Commission (FSC) is about to end the monopoly of Taiwanese banks on the trust business and open up the industry to the island’s fund players. Towards this end, the FSC has published Wednesday a set of 14 draft rules for industry consultation.
Under the proposed new framework, fund product manufacturers and fund distributor agents will both be allowed into the industry, provided that they meet the regulator’s licensing requirements, operational experience and investment manager qualifications.
Trust products were previously the exclusive domain of Taiwan’s commercial banks, and the concept itself is taken from the trust model in the US. Trust managers can offer discretionary asset management and anonymity to clients. The industry’s business is valued at NT$7.32 billion ($231.98 billion), according to the latest statistics from the Trust Association.
The FSC’s efforts to reinvigorate Taiwan’s asset management industry this year have been praiseworthy. Of the many plans the FSC has announced this year, Chang notes the removal of restrictions to China investments and the introduction of UCIT III-compliant fund codes (no more restrictions on derivatives) have been the two biggest landmark announcements so far this year.
Meanwhile, the FSC has also recently announced that it is allowing foreign-registered exchange traded funds (ETFs) to raise assets in Taiwan.
Opening up trust funds to Taiwan’s fund players will not only create a level playing field between bankers and asset managers, but ultimately attract a lot of the Taiwanese wealth that is stashed offshore back to the island.
Filed under: News, Asia, Derivatives, ETF, Exchanges, Taiwan, TSEC Taiwan Securities Exchange
