FSC mandates risk warning and training for virtual asset ETF investments.
Photo by Roméo A. on Unsplash
Key Takeaways
- Taiwan FSC now permits professional investors to invest in foreign virtual asset ETFs.
- Securities firms must evaluate investor suitability and provide regular training.
Taiwan’s financial regulator, the Financial Supervisory Commission (FSC), now allows professional investors to invest in foreign virtual asset ETFs through a re-entrustment method, according to a Monday press release from the FSC.
Re-entrust investments refer to the process where investors delegate their investment decisions or management to another party, here a sub-brokerage or a fund manager that specializes in virtual assets.
The latest move is part of the FSC’s effort to diversify product offerings and boost the re-entrustment business of the nation’s securities firms, the agency noted.
Due to the high investment risks associated with these crypto-related ETFs, the FSC decided to limit the offering to professional investors like institutional investors, high-net-worth legal entities, and experienced high-asset clients.
In addition, securities firms are required to establish a virtual asset ETF product suitability system, approved by their board of directors, to evaluate a client’s understanding and experience before allowing them to invest in the ETFs.
These firms must also provide regular education and training for business personnel on virtual assets to ensure comprehensive product understanding, while clients, excluding professional institutional investors, must sign a risk disclosure statement before making their first investment, the FSC added.