In order to guide domestic securities firms and futures commission merchants to attach greater importance to protecting the interests of elderly financial customers, the FSC asked the Taiwan Securities Association, the Securities Investment Trust and Consulting Association of the R.O.C., and the Chinese National Futures Association (hereinafter collectively referred to as "the three securities and futures industry associations") to establish, respectively, "Self-Regulatory Rules for the Provision by Securities Firms of Financial Services to Elderly Customers," "Suitability Evaluation Criteria for Financial Products and Services Offered to Elderly Customers by Securities Investment Trust Enterprises (SITEs) and Securities Investment Consulting Enterprises (SICEs)," and "Suitability Evaluation Criteria for Financial Products and Services Offered to Elderly Customers by Futures Service Enterprises." The FSC also asked the Chinese National Futures Association to amend the "Self-Regulatory Rules for Management of Account Opening Due Diligence and Provision of Financial Services to Elderly Customers" (hereinafter, the "Self-Regulatory Rules"), and required securities and futures firms to incorporate these Rules into their internal control systems.
The self-regulatory rules drafted by the three securities and futures industry associations have already been filed with and accepted by the FSC. The term "elderly customer" in these rules means "person aged 65 or older" as defined in Article 2 of the "Senior Citizens Welfare Act." Securities and futures firms will be required in the future by these self-regulatory rules to strengthen safeguards for elderly customers. Such measures include the following: (1) for KYC procedure, design appropriate risk profile assessment mechanism for elderly customers that matches their risk characteristics; (2) for KYP procedure, properly consider relatively impactful factors, and fully reflect a product's risk rating and its characteristics; (3) when conducting suitability analysis for elderly customers, properly assess and explain the suitability of any product being recommended and the reasons for the recommendation; (4) the advertising and contractual documents must be made easily readable when providing financial services to elderly customers; (5) when an elderly customer behaves in an unusual manner, firms are advised to show concern and make inquiries; and (6) establish a transaction inspection or confirmation system for the selling of high-risk products to elderly customers, and elderly customer transaction monitoring and enhanced inspection mechanisms.
The FSC has granted a 6-month buffer period, and the self-regulatory rules will enter into force from 1 October 2022. In addition, the FSC has also asked the three securities and futures industry associations to provide their member firms with assistance in adopting their own internal operating rules and strengthening training measures for employees, and has also asked the associations to hold informational meetings as necessary to facilitate implementation.