The Financial Supervisory Commission has allowed professional investors to invest in overseas virtual asset spot ETFs through re-mandates, which not only provides investors with more investment options but is also a major step forward in Taiwan's financial innovation.
The U.S. Securities and Exchange Commission (SEC) approved the first Bitcoin spot ETF in January this year, with a total of 12 Bitcoin spot ETFs listed. So far, the cumulative net inflow of Bitcoin spot ETFs is US$18.8 billion, and in July, the SEC approved the listing application of Ethereum spot ETF, which means that cryptocurrency has been accepted by traditional finance, which has written an important page in the history of cryptocurrency.
At the time when Bitcoin spot was listed, many Taiwan brokerage firms announced that the competent authorities had notified that, considering the large price fluctuations and high risks of virtual currency commodities, in order to protect investors, they could only accept entrustment to sell foreign securities-linked virtual currency spot and futures related commodities for the time being, and no new entrustment to buy would be allowed.
However, the Taiwan Financial Supervisory Commission recently adopted the advice of the Securities Association and announced that it would allow professional investors to purchase virtual asset spot ETFs listed on overseas exchanges through a re-entrustment method. This policy represents a major step forward for Taiwan in the field of virtual asset investment, making it easier for Taiwanese to access cryptocurrency-related products and promoting financial innovation. The Financial Supervisory Commission gave two major points:
The policy is initially open to professional investors with rich investment experience. According to Article 3 of the first sheet of offshore structured product management rules, professional investors include professional institutions such as financial institutions, high net worth investment legal persons, high asset clients, legal persons or funds that are professional investors, and natural persons with total assets of more than NT$30 million.
Currently, virtual asset futures ETF trading is not open, only virtual asset spot ETF trading is open.
In addition, the Financial Supervisory Commission requires securities dealers to implement four major supporting measures to enable buyers to fully understand the risks:
Strengthen the know-your-customer procedures: establish an appropriate virtual asset ETF product suitability assessment system and submit it to the board of directors for approval.
Signing of risk warning: Unless the client is a professional institutional investor, a risk warning must be signed before the first purchase before the brokerage firm can accept the commission.
Product characteristic information provision: Securities firms are required to provide product characteristic information before the client purchases a virtual asset ETF for the first time.
Education and training for business personnel: Securities firms should regularly organize education and training on virtual assets and related products for their business personnel to ensure that relevant personnel have a full understanding of the products.
After the Financial Supervisory Commission announced this news, Dr. Bao, a KMT legislator who has been fighting for the rights of crypto citizens in Congress, also posted a message on Facebook to share the good news:
Dear viewers! It’s open! Taiwanese can finally legally, compliantly, and reasonably purchase virtual currency ETFs that are not limited to Bitcoin! In March of this year, Dr. Bao, who had just taken office as a non-district public servant, spoke out for the virtual world netizens, urging the Financial Supervisory Commission to face up to the world trend and not unilaterally prohibit the public from purchasing Bitcoin ETFs in various countries through re-entrustment with a letter of decree; after half a year, I thank the Financial Supervisory Commission for its courage to take responsibility and respond, and finally announced that professional investors can re-entrust and invest in virtual asset (Bitcoin, Ethereum) spot ETFs listed on overseas exchanges.
Legislator Ge Rujun also mentioned in the article that although there are still restrictions on purchasing Bitcoin spot ETFs after the opening at this stage, it is a major step forward for Taiwan, and he is full of expectations for Taiwan's financial innovation.
I believe that this is just a small step taken by the Financial Supervisory Commission. Although there are restrictions, it is still a big step for Taiwan to embrace the virtual asset market. Let us look forward to the opportunity to gradually open up more diversified selection standards for financial technology products in the future, and work together to build Taiwan into a financial center for the virtual world and create the next-generation ROC─Republic of Crypto!
