Taiwan is expected to be the fifth region to approve a fintech sandbox initiative, after Singapore, Malaysia, Hong Kong, and Thailand, according to local media reports.
The supervisory sandbox will permit applicants to develop and test fintech solutions without full compliance. The initiative aims to provide an optimum regulatory environment for startups developing prototype financial technology.
A bill has passed the first review and is heading to final approval. In the review, legislators have extended the experiment period to a maximum of 36 months from 18 months in a preliminary plan submitted by the government’s executive arm, reports said. If approved, Taiwan will have the longest experimental period among the existing sandboxes. Singapore, for example, allows nine months and the UK six months.
The framework is expected to receive final approval in December. The sandbox will be supervised by Taiwan’s Financial Supervisory Commission (FSC).
Fintech regulation docket
In other fintech regulatory moves, local media reported that the FSC in July permitted the use of robo-advisers. In August, regulators added that they would allow 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.
Last month, the Taiwan Fintech Industry Development Association (FIDA) signed a memorandum of understanding with the Fintech Association of Hong Kong and corresponding associations in Singapore and Switzerland. The purpose was to improve the fintech ecosystem across Asia and Europe, as cross-border collaboration on fintech gains momentum.
Industry organisation ICI Global believes fintech disruption is likely to come from China, FSA reported earlier. China accounts for 88% of the world’s fintech investment and significant innovation is occurring, driven by firms with an immense user base such as Alibaba and Tencent, according to a PWC report.
