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FSC authorizes group buy platform for bonds in regulatory sandbox experiment

The Financial Supervisory Commission (FSC) has approved the application by Joinvest Co. to begin a group buy platform experiment in the regulatory sandbox for one year. The experiment shall be limited to an approved range of items and time period, and are not bound by legal provisions listed in Subparagraph 6, Article 26 of the Financial Technology Development and Innovative Experimentation Act. In addition, the FSC has also agreed that Article 23-1 of the Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises is not applicable to the experiment during the period authorized. This has been the first approved financial technology innovation experiment since the FSC published the FinTech Development Roadmap on August 27, 2020.
The FSC indicated that Joinvest, after completing an counseling process, submitted its application on July 9, 2020, and is the second startup team in the FinTech Space that has received approval to take part in a sandbox experiment. The company employs technology innovation in its securities brokerage and proprietary businesses, which mainly focus on platform services that provide group buying of local and foreign bonds. The company uses blockchain technology to record all transaction data, and it also uses trust services provided by the First Bank to protect investors. Bonds generate higher yields than time deposits, and are still relatively safe. However, the investment threshold is high, so the experiment aims to enable retail investors to invest in bonds for only NT$ 100 or USD 10. The design will satisfy the need of ordinary investors to hold bonds under the current low-interest environment. Moreover, the transactions will be executed completely online, which is in line with the current trend on digital finance and promotion of financial inclusion.

The FSC is now actively promoting the FinTech Development Roadmap through various measures. It has amended the regulation governing the establishment of the FinTech Development and Innovation Center to strengthen its role as the single platform to communicate and coordinate among different government agencies, so that it can help firms to clarify problems or questions regarding laws and regulations arising from cross-institution and cross-agency issues. Take this experiment as an example,  the FSC held a meeting on tax issues that may be involved, Joinvest, the Taxation Administration of the Ministry of Finance, and the First bank were invited to discuss related taxation issues and problems that might arise from the experiment, to facilitate the whole process of the experiment.

In the future, the FSC will continue to promote FinTech innovation. Financial institutions, tech firms, and start-ups are encouraged to adopt the dual mechanisms — regulatory sandbox and business trials — to develop diversified, tailor-made financial innovative products and services that meet people''s needs, and provide a better customer experience. By doing so, the regulator expects to reach  goals of improving financial competitiveness and achieving financial inclusion.

Contact: Chiao Hung Huang, Section Chief of the Fintech Innovation Center

Tel: (02)8968-0086

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  • Update: 2020-11-25