Taiwan to Ease Rules on Insurers’ Interested Party Deals

The Financial Supervisory Commission (FSC) has set its sights on making Taiwan an asset management hub in Asia. This initiative aims to retain capital, draw in investments, and back local industries. To boost the asset management sector, the FSC is urging life insurers to work with domestic asset managers for discretionary fund investments. Since many Taiwanese insurance firms and domestic securities investment entities within financial holding companies are “interested parties,” the FSC, after risk assessment, is looking at loosening restrictions on their discretionary investment transactions.

The FSC has prepared amendments to Articles 4 and 6 of the “Regulations Governing Transactions Other Than Loans between Insurance Enterprises and Interested Parties.” These will be made public soon. Currently, insurance firms doing discretionary transactions with interested parties need board approval and can’t give better terms than to similar entities. The amendment will let the same approval process cover transaction fee and commission management.

Previously, if an insurer bought or sold over 10% of an ETF from an interested party, it counted towards total transactions. The amendment, however, excludes these transactions from the 10% rule if done through a discretionary investment setup, in line with current regulations. The draft amendments will be published in the Executive Yuan Gazette and on the FSC’s website, with a 30 – day comment period.

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