FSC Chairman Unveils Three Major Policies and Loosens Eight Measures
Within a month of assuming office on May 20th, the new FSC Chairman, Thomas Peng, quickly launched a series of reform measures. In a recent joint media interview, he emphasized that establishing a “safe” and “developing” financial market will be the focus of his administration. Peng revealed that in order to achieve this goal, he will promote three important policy waves and loosen eight financial measures, covering all three financial industries.
The Three Key Focuses of the FSC’s Future Policies:
– Establish a regulatory adaptation platform initiated by experts and scholars to make FSC regulations more grounded.
– Present an accelerated plan for the development of financial technology innovation in July.
– Propose a plan to create an Asian asset management center in August.
The First Key Focus: Establish a Regulatory Adaptation Platform Initiated by Experts and Scholars
The first initiative introduced is the “Action Innovation Regulatory Adaptation Plan.” Before assuming office, Peng had already held multiple consultations with associations and industry players, gathering 124 recommendations, of which 38 were confirmed as immediately viable and will promptly respond to industry demands.
Peng plans to establish a “Financial Development and Innovation Regulatory Adjustment Recommendation Platform,” covering four major areas: banking, insurance, securities, and technology innovation. However, unlike in the past, this platform will be led by scholars and experts who will regularly identify issues from the market and set up regulatory review teams, transforming regulatory adjustments from passive to proactive. Peng emphasizes the need for diverse voices in the financial market, so each team will be composed of scholars from different fields to ensure specialized division of labor and collaboration in various areas.
In addition, the FSC will loosen eight policy measures in the hopes of enhancing the flexibility and competitiveness of the financial market:
– Open and simplify the offline operations and procedures of internet-only banks.
– Allow for mini Taiwan Stock Index Futures products.
– Insurance companies that have invested in public infrastructure with a sustainable application coefficient of 1.28% will be exempt from adjusting to the new regulation.
– Simplify the process of bank issuance and structure of bonds.
– Relax the number of appointed financial institutions for overseas funds that do not possess the nature of investment trust funds.
– Allow securities firms to establish simplified branch offices.
– Amend the foreign exchange price reserve system to stabilize hedging costs for life insurance companies.
– Continue to promote trust evaluation incentives.
The Second Key Focus: Promote the Concept of “Lightweight Sandbox”
Peng pointed out that innovation and development in the financial market need to be based on safety and proposed an accelerated plan for financial technology innovation. After the success of Taiwan’s Regulatory Sandbox experiment, there is a need for further regulatory revisions in order to transform the experimental results into financial technology services. However, the process of amending laws and legislation is often complex and lengthy. Therefore, Peng introduced the concept of a “lightweight sandbox” in the hopes of expanding the scope of trials and strengthening cooperation between the financial and technology industries through self-disciplinary norms and review points.
Peng stated that advocating for opportunities for life insurance companies to invest domestically is also an important aspect. The FSC has convened meetings with the six major life insurance companies to discuss how to overcome the restrictions of existing public construction projects and proposed specific solutions. Peng revealed that they will first identify “experimental cases,” and after the success of these cases, they will persuade other departments to promote these measures. This approach not only reduces risks but also ensures the effectiveness and feasibility of policies.
The Third Key Focus: Establish an Asian Asset Management Center
Peng’s third important policy is to establish an Asian asset management center. In fact, previous FSC chairmen have had similar expectations, but they were not realized in the end. Peng hopes to break this curse and, through 20 years of preparation and brewing, make Taiwan one of Asia’s asset management centers. He pointed out that Taiwan has abundant private wealth and numerous successful Taiwanese businesses overseas, which are Taiwan’s advantages. By fully utilizing these strengths, Taiwan can establish a unique asset management center that attracts international capital and talent.
Peng believes that other countries’ experiences are worth learning from, such as Japan’s establishment of “special zones” to promote the construction of asset management centers through the division of labor among different cities. Taiwan can learn from these successful experiences while leveraging its own advantages, such as having a complete industrial foundation and excellent financial technology talents. Peng hopes that in the future, Taiwan can become an important choice for investments in areas such as green energy startups, making its asset management center uniquely competitive.
Peng’s series of reform measures since assuming office demonstrate his determination and courage to promote innovation and development in the financial market. By promoting the Action Innovation Regulatory Adaptation Plan, accelerating financial technology innovation, and establishing an Asian asset management center, it is evident that Peng aims to achieve comprehensive development of Taiwan’s financial market while ensuring its safety.