In order to encourage innovation, develop domestic Fintech and increase competitiveness of domestic financial industries, the Executive Yuan approved the draft act prepared by the FSC at its 3547th meeting and forwarded it to Legislative Yuan for review on May 5, 2017.
According to the FSC, the draft act was produced to establish a mechanism for financial technology innovative experimentation, create a safe environment for Fintech R&D activities and pilot tests for financial service industry and related industries, while maintaining financial market order, protecting customers’ right, promoting principle of responsible innovation, and providing flexible regulatory environment that facilitates Fintech business incubation and secures niche for domestic financial industry through government efforts. The FSC will actively communicate with the Legislative Yuan for earlier passage. Key points of the draft act are as follows:
1. Definition of the term “innovative experimentation.”
2. Requirements regarding innovative experimentation, including applicant''s qualification requirements, application documentation, review meeting, review considerations, review period, decision-making procedure of the review, period of innovative experimentation, application for change to innovative experimentation and information disclosure on the website of the regulatory authority.
3. The regulations regarding the deadline for starting the innovative experimentation, information security, supervisory measures, revoking the approval and evaluation of the results of innovative experimentation.
4. When the innovative experimentation is inventive and facilitates the development of financial services, the regulatory authority should evaluate the progress of that experiment and facilitate related business activities by reviewing related financial regulations, providing assistance to the applicants for their own startup, strategic cooperation and referral to related units responsible for providing business startup assistance. If the applicants need time to adjust their business qualification in accordance with the regulated requirements, while they plan to apply for the permit of engaging in the experimentation related financial activities. The applicants may apply for extending the period of innovative experimentation as a self-adjusted period.
5. The regulatory authority shall set up a responsible unit to accept, review and evaluate applications for innovative experimentation. Otherwise, the competent regulatory authority shall be authorized to lay down requirements for the application process, review criteria and related matters of innovative experimentation.
6. Fees regarding application, review and approval of innovative experimentation are exempted according to provisions of the Act.
7. In order to protect interests of experiment participants, the applicant shall assume liabilities to the participants stipulated in related regulations, such as the Personal Information Protection Act. The Financial Ombudsman Institution may accept and handle civil disputes between the applicant and the experiment participants and charge the applicant a fee for such services. The applicant has to accept the Institution’s decision when the compensation approved is less than a certain amount.
8. The regulatory authority in consultation with other agencies, may agree to grant exemption from applicable regulations or directions in case-by-case experiment. And the Act also waives criminal and administrative responsibilities stipulated in related financial laws and regulations.