Taiwan’s regulator said it would scrap a rule that requires a master agent contract on investment information collection as a prerequisite for licensing robo-advisory services. The move is expected in July, according to a notice published this week by Taiwan’s Securities and Futures Bureau.
This move is aimed at foreign fund houses, which primarily offer Sicav funds to local investors.
If enacted, robo-advisory operators that plan to open in Taiwan will only be required to demonstrate their capability to collect up-to-date data on offshore funds and investments.
The bureau said the rule relaxation will align the robo policy with market realities. The current requirement for data collection through a master agent may be obsolete because data on global funds can be obtained from a wide variety of sources.
“The channels for obtaining financial information have diversified,” the notice said.
After the requirement is realxed, the market should expect an increase in robo-advisory investment services, authorities believe.
Last summer, Taiwan’s Financial Supervisory Commission (FSC) permitted the use of robo-advisors for the first time. The license includes allowing robo-advisors to re-balance an investor’s portfolio if the return on a specific asset or on the portfolio deviates from the chosen benchmark. Before deploying the automatic adjustment, investors must give prior consent and be informed instantly after any re-balancing.
A survey from Boston-headquartered Cerulli Associates noted that only 50% of respondents from Taiwan were willing to use robo-advisors. The number is smaller than investors in countries with strong online distribution, such as China and South Korea.
Taiwan’s regulator has also joined with counterparts in other Asian countries in setting up a regulatory sandbox to encourage domestic and international start-ups and support development of fintech products and services.
