Taiwan permits professional investors to access foreign virtual asset ETFs.
Investment limited to institutional and high-net-worth clients due to risks.
Taiwan’s Financial Supervisory Commission (FSC) has announced a new initiative allowing professional investors to invest in foreign virtual asset exchange-traded funds (ETFs) via a re-entrustment method. This decision, detailed in a press release on Monday, aims to diversify investment options and enhance the re-entrustment business of the nation’s securities firms.
Re-entrustment involves delegating investment decisions to specialized sub-brokerages or fund managers, reflecting a growing trend in asset management. However, the FSC has restricted this opportunity to professional investors due to the inherent high risks associated with virtual assets. Eligible investors include institutional investors, high-net-worth legal entities, and experienced clients with substantial assets.
To facilitate this new offering, securities firms must implement a robust virtual asset ETF product suitability system, subject to board approval. This system will evaluate clients’ understanding of virtual assets and their investment experience prior to allowing purchases. Moreover, clients, except for professional institutional investors, will be required to sign a risk disclosure statement before their initial investment.
Proper Awareness And Information Inclusion
The Taiwan FSC emphasized the importance of education and training in this rapidly evolving sector. Securities firms must provide regular training for their personnel on virtual assets to ensure comprehensive product knowledge. Additionally, firms are mandated to furnish clients with detailed information regarding virtual asset ETFs prior to their first purchase.
This regulatory move underscores the FSC’s commitment to safeguarding investors while enhancing the competitive landscape for Taiwanese securities firms. The authority will continue to monitor the execution of re-entrusted business and refine regulations to protect investor interests effectively.
As Taiwan positions itself to engage with global virtual asset markets, the FSC’s initiative marks a significant step towards integrating professional investors into the burgeoning crypto landscape.
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