Meeting with SFB Deputy Director General in discussion of
issues included in ECCT 2011-2012 Asset Management Papers
and related issues
Date: 21st Mar 2012
Time: 3:00pm – 5: 10 pm
Venue: SFB office
Company Name
Member Name
I. Attendance (ECCT side):
Attendant Name
Ms. Francine Wu
Schroder Investment Management (Taiwan) Ltd.
Ms. Francine Wu
Mr. Rick Chen
FIL Securities (Taiwan) Ltd.
Mr. Rick Chen
Mr. Wade Chou
Allianz Global Investors Taiwan Ltd.
Ms. Rita Hsu
Ms. Carol Wang
AllianceBernstein Taiwan Limited
Mr. Derek Yung
Ms. Jenny Liu
Deutsche Far Eastern Asset Management Co., Ltd.
Ms. Jenny Liu
Mr. Kite Lai
ING Securities Investment & Trust Co., Ltd.
Mr. Ashwin Mehta
Ms. Silvia Chang
Invesco Taiwan Limited
Ms. Silvia Chang
Mr. Ronnie Chang
ECCT
Mr. William Huang
ECCT
II. Summary:
Topics
Discussion and Outcome
1. Restrictions on fund
managers
1. Both SFB and FSC share the Committee’s view on this issue of relaxing
the restrictions on fund managers.
2. SFB is now drafting a proposal for further discussions at the FSC.
3. The rule to relax the restrictions on fund managers is expected to be
promulgated within 6 months.
4. In SFB’s proposal, fund managers are allowed to be assigned as an
investment advisor for both onshore and offshore institutions.
2. Full delegation of
portfolio management
The committee’s proposal is not in line with government/FSC’s policy
of establishing a Taiwanese financial services and investment platform.
SFB will not consider the committee’s proposal in the short term.
3. Allowing mutual
funds to be
denominated in both
NT dollars and foreign
currencies
1. The SFB share the committee’s view on the issue and already contacted
CBC on this issue. However, CBC still have the concern over the FX
management once a mutual fund can be denominated in different
currencies.
2. SITCA is now collecting comments from the fund and financial services
industry so as to draft a proposal for further study.
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Topics
Discussion and Outcome
4. Signing of the 2nd
stage MOU with
foreign financial
supervisory authorities
1. SFB noted that there is no reply from Luxembourg and Ireland already
refused to continue the discussion on the MOU due to the situation of its
domestic financial market.
2. SFB reminded the committee that Luxembourg will be benefitted from
the signing of the 2nd stage MOU with Taiwan. SFB suggested that the
committee could communicate with Luxembourg CSSF via the ECCT or
member companies.
3. Progresses have been made on the signing of the 2nd stage MOU with
Hong Kong. Currently, SFB is working on the regulatory mapping and
the detail of financial supervision with the HK counterparty.
5. Restriction on
derivative investment
cap in fund portfolios
1. SFB note that they want a more conservative approach on the derivatives
finds but they are willing to review the exemption of 40% cap of
derivatives investment in a fund portfolio on a case-by-case basis,
providing that firms have a prudent risk management in place. SFB also
ask SITCA to study the possibility of establishing a review
panel/committee to accelerate the approval process.
2. It is suggested to ask SITCA to study the possibility of revising
calculation by including long and short positions.
3. The method adopted in Taiwan for calculating the percentage of
derivative in fund portfolios is based on Ireland’s approach. If there is a
change in the calculation formulation, or there are other methods
adopted by other jurisdictions might be suitable for Taiwan financial
market, it is suggested that the Committee could provide them to SITCA
for a discussion.
6. Self-directed pension
scheme
SFB have no objection on the Committee’s view but reiterate that the
Council of Labour Affairs (CLA) plays a key role on this issue. SFB
suggested that the Committee need to discuss and exchange opinions
with CLA to resolve the issue effectively.
7. Internal guidelines for 1. SFB will notify SITCA if there is any updated guideline applying to the
fund approval and
fund application
onward
operating 2. The SFB want to slow down the market for high yield bonds. For
procedures
onshore funds, high yield bonds could not be continuously issued within
one year by an identical SITE. For offshore fund, no application will be
approved if there is any high yield bond available in the market issued
by an identical master agent. However SFB will monitor the market and
adjust the above said guideline accordingly.
3. In Principle, the review periods for the approval of onshore fund and
offshore fund are 2 months and 60~80 days respectively depending on
the complexity and the quality of application documents. SFB do not
recommend that firms start sales training before their application is
approved.
8. Increasing the number 1. In SFB’s view, financial institutions are excluded when calculating the
of qualified offeree for
number of qualified offerees of a private placement.
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Topics
Discussion and Outcome
Private placement of 2. SFB noted that it is necessary to amend the Securities Investment Trust
onshore and offshore
and Consulting Act to increase the maximum number of offeree of a
fund
private placement. It is recommended that the committee could propose
an amendment of existing law through SITCA.
9. Extending the public
announcement
by
master agent from 3
calendar days to 10
business days upon
occurrence of events
listed in the Article 12
of
Regulation
Governing Offshore
Funds
10. Disclosing
the
portfolio
of
discretionary account
to head office for risk
control purpose
1. SFB mentioned if the deadline of the “3 day public announcement
requirement” falls on weekend or national holidays, the deadline will be
automatically extend to the next business day as stated in the
Administrative Procedure Act.
2. SFB noted that the compulsory part for translation and public announce
within 3 days are those event listed in the Article 12 of the Regulation
Governing Offshore Funds. It is not necessary for master agent to
translate the all prospectus. SFB will clarify this issue in their Q&A.
1. SITCA have been studying this issue since last October and have already
presented the proposal to Ministry of Justice for comment. SFB
suggested members provide information such as the practice adopted in
other jurisdiction to support SITCA’s study.
2. SFB reminded the Committee to be aware of the PDPL. There are legal
risks for disclosing the investors’ portfolio to the third party without a
consent letter from investors.
11. Allowing management
It is suggested by SFB that the fund issuer could create different share
fee of SITE funds
classes for different types of customer since providing any rebate to
rebate to legal person
customers may violate the current regulation.
investor
for
the
purpose of preventing
double charge
12. Adjustment
of
Currently, SFB is reviewing the draft rule provided by SITCA on Mar
tolerable range for the
14. SFB will publish the new regulation if no further concern is raised.
miscalculation
of
fund’s net asset value
13. Building Taiwan as an 1. CBC reiterated that the prerequisite of issuing onshore RMB
offshore RMB centre
denominated onshore funds is to establish a currency settlement system.
by including RMB 2. Once the TWD-RMB settlement system is established, the existing
denominated products.
onshore funds could be denominated in RMB by revising the contract
and providing a different share class.
14. Recommending SFB
to advise a reasonable
range of transaction
fee
for
securities
transaction
via
securities firms
SFB reiterated that the purpose of EB’s review on the transaction fee is
to protect the interest of investor. EB usually ask firms to regularly
review their fee structure to protect investors, however they do not place
any limit on the fee. Therefore it is advised that firm should conduct a
regular review on the transaction. If the Committee encounters any
difficulty on this issue, it is suggested to organise a separate meeting
with FEB.
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