Taiwan’s Financial Supervisory Commission (FSC) released the latest list last week that nine foreign asset managers have received privileges for their on-the-ground businesses under the Deep Cultivation Plan.
The FSC launched the Deep Cultivation Plan in 2013 to encourage foreign fund houses to commit to the domestic fund industry and narrow the gap between the onshore (locally-domiciled) and offshore (such as Ucits funds) markets.
This year, the nine firms that were awarded incentives include Alliance Bernstein, Allianz Global Investors, Schroders, Invesco, JP Morgan Asset Management, Fidelity International, Nomura Asset Management, Franklin Templeton Investments and NN Investment Partners.
This is the first time that Nomura Asset Management received incentives from the scheme, while UBS Asset Management was the only firm from last year’s list that did not receive any privileges this year.
A Taiwan-based spokeswoman at Nomura AM said that it is the first time that the firm applied for the incentive scheme.
UBS AM, meanwhile, did not apply for this year’s incentive scheme, a company spokeswoman said, but did not elaborate.
Last year, UBS AM also topped the list of offshore funds that were liquidated and merged, liquidating five and merging four funds, according to data from Taipei-based consultancy firm Keystone Intelligence.
After each annual review of foreign asset managers, the regulator gives out benefits to reward those firms that show a commitment to the domestic market.
The plan is based on eight criteria, covering three broad categories: Taiwan onshore presence; local assets under management; and cultivation of local talent.
Winners must pass the basic threshold for these three categories, and at least four criteria in total, to gain one incentive from a choice of seven. Those that meet five criteria or more can choose two benefits, which is the maximum number a firm can hold at one time.
The incentives include introducing new types of funds, faster approval of funds, the ability to submit more products for approval at one time, and a higher allowance for taking exposure to mainland Chinese securities, according to the FSC. Under the Deep Cultivation Plan, managers can invest up to 40% of one of their offshore funds’ assets in onshore Chinese securities permanently. The cap for offshore funds outside the scheme is 20%.
This year, Alliance Bernstein, Allianz GI and Schroders met five of the eight criteria, allowing them to receive two benefits. The other six met four criteria and can choose one incentive.
All the selected privileges are valid from 1 October 2020 to 30 September 2021.
|Firm||Selected benefit||Selected benefit|
|Alliance Bernstein||Introduce new types of funds||Higher allowance for taking exposure to mainland Chinese securities|
|Allianz Global Investors||Introduce new types of funds||Ability to submit more products for approval at one time|
|Schroders||Introduce new types of funds||Higher allowance for taking exposure to mainland Chinese securities|
|Invesco||Introduce new types of funds / ability to submit more products for approval at one time / Higher allowance for taking exposure to mainland Chinese securities|
|JP Morgan Asset Management||Introduce new types of funds / ability to submit more products for approval at one time / Higher allowance for taking exposure to mainland Chinese securities|
|Fidelity International||Introduce new types of funds / ability to submit more products for approval at one time / Higher allowance for taking exposure to mainland Chinese securities|
|Nomura Asset Management|
|NN Investment Partners|