Featured Product

    FSC Taiwan Issues Multiple Regulatory Updates

    August 12, 2021

    The Financial Supervisory Commission of Taiwan (FSC Taiwan) announced certain measures in context of the pandemic as well as a disclosure rule for environmental, social, and governance (ESG) funds. The regulatory authority decided to defer the implementation of Basel III reforms by one year, as part of the response to the pandemic. In addition, the 2% additional internal capital requirement that the domestic systemically important banks, or D-SIBs, must meet has also been postponed by one year, to ensure that domestic banks will be in a position to support economic activity. Furthermore, FSC Taiwan has adopted a number of measures to spur financial institutions to improve mechanisms related to digital finance amid COVID-19 pandemic. Banks are encouraged to handle COVID relief loans digitally whenever possible and are allowed to handle identity confirmation online for relief loans.

    FSC Taiwan has approved a security mechanism (filed by the ROC Bankers Association) that allows existing corporate customers of banks to take loans online and allows for corporate COVID relief loans to be handled digitally. FSC Taiwan also asked the ROC Bankers Association to further study security mechanisms that would allow new corporate customers to take loans and handle identity confirmation online. This new approach will be implemented after the Bankers Association has completed the necessary model contracts and self-regulatory rules. FSC Taiwan also published an administrative rule on the screening criteria of systemically important banks. A bank designated by the FSC Taiwan as a systematically important bank shall meet the enhanced supervision requirements, as listed in the rule, from the year following the designated date. The administrative rule came into effect on July 30, 2021.

    Additionally, FSC Taiwan is encouraging "bill finance companies" to introduce ESG concepts into business operations; a bill finance company is a financial market participant and has the function of allocating credit resources. In July 2021, FSC Taiwan also announced a disclosure rule for ESG funds issued by Securities Investment Trust Enterprises (SITEs) to strengthen the integrity of the prospectus on ESG investment funds. FSC Taiwan has set out the following key supervisory principles for review of ESG fund disclosures:

    • When a SITE offers an ESG fund, the issuance plan, prospectus, and other such documentation must disclose ESG investment objectives and measurement standards, investment strategies and methods, investment ratios and allocations, performance indicators, exclusion criteria, risk warnings, participation in stewardship, and regular disclosures.
    • An existing ESG fund whose prospectus does not make all of the aforementioned disclosures must correct the deficiency within six months of the date of issuance of the review principles.
    • For an existing non-ESG fund whose prospectus has an "Investment Strategy and Features" section that already includes references to "sustainability" and "corporate social responsibility," or whose investment strategies or asset allocations take ESG concepts into consideration, if a proposal is made to rename the fund as an ESG fund, the SITE may do so without convening a beneficiaries meeting as long as the name change would not change the product positioning or basic investment strategy of the fund. However, the SITE must file an attorney's opinion affirming that the proposed name change would not have any material impact on the interests of the beneficiaries and apply with FSC Taiwan for approval to amend the trust agreement. The SITE must also publicly announce and inform beneficiaries of the change 30 days before the amended trust agreement enters into force.

     

    Related Links

    Keywords: Asia Pacific, Taiwan, Banking, Securities, Basel, COVID-19, Regulatory Capital, ESG, Climate Change Risk, Disclosures, Credit Risk, Sustainable Finance, D-SIB, FSC Taiwan

    Featured Experts
    Related Articles
    News

    APRA Finalizes Guidance on Management of Climate Change Risks

    The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.

    November 26, 2021 WebPage Regulatory News
    News

    European Council Adopts Position on Digital Finance Package Proposals

    The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).

    November 25, 2021 WebPage Regulatory News
    News

    PRA Proposes Rulebook Changes; BoE Extends BEEDS Testing Window

    The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.

    November 25, 2021 WebPage Regulatory News
    News

    EC Proposes New Measures Under Capital Markets Union Package

    The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.

    November 25, 2021 WebPage Regulatory News
    News

    EBA Publishes Standards to Calculate Risk-Weights of CIUs Under CRR

    The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).

    November 24, 2021 WebPage Regulatory News
    News

    FED Outlines Lending Conditions and Supervisory Activities in H1 2021

    The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.

    November 24, 2021 WebPage Regulatory News
    News

    APRA Expects Boards to Strengthen Ability to Oversee Cyber Resilience

    The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.

    November 23, 2021 WebPage Regulatory News
    News

    FSB Updates List of Global Systemically Important Banks

    The Basel Committee on Banking Supervision (BCBS) published further information related to its 2021 assessment of global systemically important banks (G-SIBs), with additional details to help understand the scoring methodology.

    November 23, 2021 WebPage Regulatory News
    News

    FASB Proposes Improvements to Credit Losses Standard

    The Financial Accounting Standards Board (FASB) is consulting on an Accounting Standards Update and the associated taxonomy improvements for requirements on troubled debt restructurings and vintage disclosures under the credit losses standard (for financial instruments) topic 326.

    November 23, 2021 WebPage Regulatory News
    News

    US Agencies Issue Statement on Crypto-Asset Policy Initiatives

    US Agencies issued a statement that summarizes the work undertaken during the interagency policy sprints focused on crypto-assets and provides a roadmap of future work related to crypto-assets.

    November 23, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7733