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FSC to Further Relax Relevant Regulations on Security Token Offering (STO)

Considering that international supervision of security tokens is mostly carried out in accordance with the current securities laws and regulations, or by encouraging business operators to put security tokens in the financial supervision sandbox for experiment, Taiwan's STO system was planned under the framework of the Securities and Exchange Act and a hierarchical management mechanism was adopted; cases with a fund-raising amount of less than NT$30 million are exempt from the reporting-and-entry-into-force provisions of the Securities and Exchange Act and shall be handled in accordance with the STO rules governing formulated by the Taipei Exchange, while cases with a fund-raising amount of more than NT$30 million shall enter the financial supervision sandbox for experiment.
II.  STO rules governing have been implemented for nearly two years. In order to take into account market risks and allow business flexibility, the FSC continues to request the Taipei Exchange to collect information on the current development of international practices and understand the opinions of business operators, so as to revise relevant regulations in due time. Under the principle of not contradicting the STO supervision framework above, in order to improve the business capacity of platform operators and take into account business risks, the FSC agrees with the proposal of the Taipei Exchange to adjust the relevant regulations on STOs as follows:
(I)  Amend the STO rules governing: Under the condition that a securities firm has no major violation of relevant provisions of STO rules governing, the interval for a single platform to accept the second STO or above after accepting the transactions of the first STO is relaxed to six months (originally one year). In addition, the fund-raising limit of a single platform is increased from NT$100 million to NT$200 million.
(II)  Overseas Chinese and foreign nationals may invest up to NT$30 million (inclusive) of the funds raised; the FSC will amend the relevant orders, and request the Taipei Exchange to amend STO rules governing and relevant supporting measures.
III.  STO is an emerging fund-raising model which integrates financial technology, and its benefits, risks and impact still need to be observed further. In the future, the FSC will continue to take into account financial stability and financial innovation, and seek adjustments during the STO development process in a step-by-step manner.
Contact unit:    Corporate Finance Division, Securities and Futures Bureau
Tel: (02)2774-7126
For questions, write to: FSCMAIL
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  • Update: 2022-01-25