On 8 December 2021, the FSC amended the "Regulations Governing the Conduct of Discretionary Investment Business by Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises" in order to: encourage more domestic and overseas institutions to place funds with discretionary investment accounts managed by domestic securities investment trust enterprises (SITEs) or securities investment consulting enterprises (SICEs); expand the domestic asset management industry; and strengthen regulation of the concurrent conduct of discretionary investment business by SITEs and SICEs, and trust enterprises and their personnel. Key points of the amended provisions are as follows:
1.In the "Regulations Governing Offshore Structured Products," Article 3, Paragraph 3, Subparagraph 2, items 1 through 4 set out various criteria that define what constitutes a high-net-worth corporate investor. In view of the fact that domestic and overseas institutions that meet these criteria ought to have the ability to enter into agreements related to discretionary investment matters, the amended Regulations include a newly added provision regarding an individual meets the criteria mentioned above and has applied with a SITE or SICE for recognition as a high-net-worth corporate investor; has designated its custodian institution for the assets that it intends to place under discretionary management; and is "a discretionary investment business customer who meets criteria set by the competent authority" as referred to in Article 62, Paragraph 7 of the "Securities Investment Trust and Consulting Act"). The SITE or SICE and the aforementioned high-net-worth corporate investor may make a stipulation regarding custodial trust of assets to be placed under discretionary management, without regard to Article 11, Paragraph 1 of the amended Regulations, which provide that "the customer shall place the assets in the custody of the custodian institution for discretionary investment assets or transfer them to the custodian institution by trust."
2.The amended Regulations expressly provide that when a SITE / SICE / trust enterprise or any of its directors, supervisors, managerial officers, associated persons, or employees conduct or concurrently conduct discretionary investment business, or when such an enterprise or person uses discretionary assets under management or trust property to buy/sell securities or related products, such a party is not allowed to buy or sell for their own benefit or that of a third party; and in addition to the assets that an enterprise or its personnel are prohibited from investing in, the amended Regulations additionally prohibit investments in securities-related products.