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FSC promulgates the "Operation Directions of Financial Institutions Applying for Business Trial" to relax the scope of business trials and encourage trials to test out financial innovations
2024-10-24
The Financial Supervisory Commission (FSC) will soon promulgate the "Operation Directions of Financial Institutions Applying for Business Trial" which entails significantly relaxing the scope of business trials that can be undertaken by financial institutions, expanding the types of financial institutions that can apply for business trials, establishing a priority review mechanism for applications that are conducive to financial inclusion, and encouraging financial institutions to collaborate with domestic and foreign fintech companies in business trials to enhance the overall development of the financial market.
In an effort to create a friendly regulatory environment for the innovation of financial technology ("fintech"), the FSC has implemented an innovative experimentation mechanism in accordance with the Financial Technology Development and Innovative Experimentation Act in 2018, and in 2019 launched a business trial mechanism for three financial industries – banking, securities and futures, and insurance. Through the dual mechanisms of "innovative experimentation" and "business trials," the FSC aims to provide a secure environment for conducting fintech R&D and testing, and to encourage financial institutions or innovative fintech companies to introduce innovative financial products and services in the financial market. According to the FSC, to further expand the scope and magnitude of financial innovation, and regulate applications for business trials by all financial institutions in a consistent manner, the FSC has promulgated the "Operation Directions of Financial Institutions Applying for Business Trial" according to the "Five FinTech Development Strategies."
The key points of the Directions are as follows:
Relaxing the scope of business trials: The scope of business trial is expanded to include business items not yet allowed under the administrative rules or interpretive rules of the FSC, self-regulatory rules set out by the financial industry associations, or rules of self-regulatory organizations. Financial institutions may apply for a trial of any such business item. A business trial, once approved by the FSC, is not subject to the restrictions set out in an administrative rule or interpretive rule, a self-regulatory rule set out by a financial industry association, or a rule of a self-regulatory organization mentioned in an FSC approval letter during the trial period and within the scope of the trial.
Increasing the types of financial institution allowed to apply for a business trial: Financial institutions, including banks, credit cooperatives, bills finance companies, credit card companies, trust enterprises, electronic payment institutions, securities firms, securities investment trust enterprises, securities finance enterprises, securities investment consulting enterprises, futures commission merchants, leverage transaction merchants, futures trust enterprises, managed futures enterprises, futures advisory enterprises, insurance companies, insurance cooperatives, insurance agents, and insurance brokers, may apply to the FSC for a business trial if they intend to introduce an innovative financial product or service.
Encouraging financial institutions to collaborate with other businesses: Financial institutions may partner with other businesses not in the financial sector, such as a fintech company or an information service provider, in conducting a business trial. In such event, the financial institution shall apply to the FSC for approval so as to encourage enterprises to develop innovative fintech application scenarios through cross-sector partnership.
Promoting financially inclusive innovation: To encourage financial institutions to introduce a wide variety of financial products and services that meet the needs of different groups in the society, the FSC will give priority to accepting and reviewing trial applications that are conducive to the promotion and implementation of financial inclusion.
Adjusting the required documentation for application: In coordination with the expansion of the scope of business trial this time, the FSC has simultaneously adjusted documents and contents thereof to be submitted by the applicant to facilitate evaluation of applications by the FSC.
If a financial institution has any question regarding the legality of its possible conduct of a business trial, or other queries, it may, prior to submitting a business trial application, consult and discuss with relevant departments of the FSC through the regulatory clinic of FinTechSpace or by attending an advisory meeting at the FSC FinTech Center. Such service helps enterprises reduce the time spent on figuring out compliance matters, and if necessary, helps them adjust their business model to accelerate the implementation of financial innovation.
How to better control associated risks amid rapid growth of fintech to give financial innovation greater tolerance for error while increasing the possibility of market development has been the focus of FSC in promoting fintech related policies. Guided by the "Five FinTech Development Strategies" and the "FinTech Development Roadmap 2.0," the FSC will continue to adopt diverse measures to bring about digital transformation and upgrading of the financial sector and foster the development of startup enterprises. The FSC will also solicit the opinions of fintech related businesses and gather information on practices in foreign countries, create a friendly environment for fintech innovation, and encourage financial institutions to collaborate with businesses in other sectors and introduce innovative financial products and services that meet the needs of consumers, improve the customer experience, and enhance the competitiveness of financial institutions.
Contact: Financial Technology Development and Innovation Center
Tel: (02) 8968-0086
If you have any questions, please send an email to: https://fscmail.fsc.gov.tw
Annex: Operation Directions of Financial Institutions Applying for Business Trial
In an effort to create a friendly regulatory environment for the innovation of financial technology ("fintech"), the FSC has implemented an innovative experimentation mechanism in accordance with the Financial Technology Development and Innovative Experimentation Act in 2018, and in 2019 launched a business trial mechanism for three financial industries – banking, securities and futures, and insurance. Through the dual mechanisms of "innovative experimentation" and "business trials," the FSC aims to provide a secure environment for conducting fintech R&D and testing, and to encourage financial institutions or innovative fintech companies to introduce innovative financial products and services in the financial market. According to the FSC, to further expand the scope and magnitude of financial innovation, and regulate applications for business trials by all financial institutions in a consistent manner, the FSC has promulgated the "Operation Directions of Financial Institutions Applying for Business Trial" according to the "Five FinTech Development Strategies."
The key points of the Directions are as follows:
Relaxing the scope of business trials: The scope of business trial is expanded to include business items not yet allowed under the administrative rules or interpretive rules of the FSC, self-regulatory rules set out by the financial industry associations, or rules of self-regulatory organizations. Financial institutions may apply for a trial of any such business item. A business trial, once approved by the FSC, is not subject to the restrictions set out in an administrative rule or interpretive rule, a self-regulatory rule set out by a financial industry association, or a rule of a self-regulatory organization mentioned in an FSC approval letter during the trial period and within the scope of the trial.
Increasing the types of financial institution allowed to apply for a business trial: Financial institutions, including banks, credit cooperatives, bills finance companies, credit card companies, trust enterprises, electronic payment institutions, securities firms, securities investment trust enterprises, securities finance enterprises, securities investment consulting enterprises, futures commission merchants, leverage transaction merchants, futures trust enterprises, managed futures enterprises, futures advisory enterprises, insurance companies, insurance cooperatives, insurance agents, and insurance brokers, may apply to the FSC for a business trial if they intend to introduce an innovative financial product or service.
Encouraging financial institutions to collaborate with other businesses: Financial institutions may partner with other businesses not in the financial sector, such as a fintech company or an information service provider, in conducting a business trial. In such event, the financial institution shall apply to the FSC for approval so as to encourage enterprises to develop innovative fintech application scenarios through cross-sector partnership.
Promoting financially inclusive innovation: To encourage financial institutions to introduce a wide variety of financial products and services that meet the needs of different groups in the society, the FSC will give priority to accepting and reviewing trial applications that are conducive to the promotion and implementation of financial inclusion.
Adjusting the required documentation for application: In coordination with the expansion of the scope of business trial this time, the FSC has simultaneously adjusted documents and contents thereof to be submitted by the applicant to facilitate evaluation of applications by the FSC.
If a financial institution has any question regarding the legality of its possible conduct of a business trial, or other queries, it may, prior to submitting a business trial application, consult and discuss with relevant departments of the FSC through the regulatory clinic of FinTechSpace or by attending an advisory meeting at the FSC FinTech Center. Such service helps enterprises reduce the time spent on figuring out compliance matters, and if necessary, helps them adjust their business model to accelerate the implementation of financial innovation.
How to better control associated risks amid rapid growth of fintech to give financial innovation greater tolerance for error while increasing the possibility of market development has been the focus of FSC in promoting fintech related policies. Guided by the "Five FinTech Development Strategies" and the "FinTech Development Roadmap 2.0," the FSC will continue to adopt diverse measures to bring about digital transformation and upgrading of the financial sector and foster the development of startup enterprises. The FSC will also solicit the opinions of fintech related businesses and gather information on practices in foreign countries, create a friendly environment for fintech innovation, and encourage financial institutions to collaborate with businesses in other sectors and introduce innovative financial products and services that meet the needs of consumers, improve the customer experience, and enhance the competitiveness of financial institutions.
Contact: Financial Technology Development and Innovation Center
Tel: (02) 8968-0086
If you have any questions, please send an email to: https://fscmail.fsc.gov.tw
Annex: Operation Directions of Financial Institutions Applying for Business Trial
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- Update： 2025-07-29
