The FSC has upheld the principle of a two-pronged supervisory approach in recent years; on the one hand attaching importance to risk and integrity while, at the same time, pursuing liberalization and innovative development to allow financial markets to develop evenly and financial institutions to operate sustainably; we also encourage the financial industry to help ordinary industry develop and to meet diverse financial requirements. Guided by the idea of “innovation and stability,” the FSC will continue to work to strengthen the constitution of financial institutions and actively assist financial industry gain more business opportunities to enhance overall competitiveness and maintain sustainable operations.
With respect to building a complete financial regulatory framework, the FSC has completed the promotion of five financial bills, including the Act Governing Electronic Payment Institutions, providing a solid regulatory foundation for e-commerce payment services, further promoting the sound development of the financial industry and strengthening of financial consumer protection; enforcement of this act will usher in innovations in domestic payment service and create e-commerce business opportunities, bringing significant benefits in terms of facilitating domestic e-commerce industry development and assisting young entrepreneurs.
With respect to promoting international bonds, since investment in foreign currency denominated bonds (including Formosa bonds) by insurance firms, has no longer been counted toward the 45% cap on insurers’ foreign investments, the value of international bonds (including Formosa bonds) issued reached NT$ 694.4 billion at the end of 2014, a total increase of 406%, successfully creating a win win situation not only increasing insurance firm capital use benefits but also increasing the domestic international board bond market scale.
With respect to establishing a presence in Asia, to take advantage of the move of the center of the world economy to the East and nurture Asian regional financial institutions, the FSC is continuously helping financial institutions expand their presence in Asian markets through four measures, including regulatory relaxation, cooperation with other regulatory counterparts, international talent cultivation and expanding overseas presence databases. In terms of deregulation, Article 74 of the Banking Act has been amended; the ceiling for total re-investment is now calculated by net worth (instead of paid-in capital), and the insurers’ restrictions have been eased with respect to the business scope and foreign investment cap in overseas insurance related business, in order to expedite overseas mergers and acquisitions, and help financial institutions accelerate the overseas expansion. As of the end of 2014, the number of overseas branches of various financial industries had increased markedly. In total, domestic banks have 361 overseas branches/offices, with 268 in Asia; domestic securities firms have established 125 overseas branches/offices, with 81 in Asia; insurance companies have established 23 offices, 5 subsidiaries and acquired a stake in 11 financial institutions in Asia. Also, from the second half of 2013, 15 overseas acquisitions have taken place.
With respect to expanding the business scope of financial industry, the FSC has, in accordance with the negative list principle, fully opened up the range of products that can be sold by bank OBU, as well substantially easing restrictions on the businesses that OSU can engage in and products that they can sell; at the same time, through amendment of the Offshore Banking Act, the FSC has relaxed restrictions on the establishment of OIU by insurance companies, encouraging financial institutions to innovatively develop various types of financial product and make Taiwan an Asia-Pacific wealth management center. In addition, to further expand the businesses
that financial institutions can engage in and business opportunities, opening of DBU, DSU, DIU business and products is being considered.
To strengthen the innovation capability of the financial industry, the FSC established the Financial Innovation Group and carried out a full review of regulations, quickly revising any regulations that were an obstacle to financial innovation to encourage financial institutions to build up the ability to develop financial products. In addition, in light of the fact that financial service provision models are continually being changed by new technology and innovative business models, to allow financial services to keep up with the times, keep in step with information developments, and allow customers to more conveniently use various financial services, the FSC put forward the Digital Financial Environment Building Program, aimed at building a sound digital financial environment, and also put in big data application and analysis and open data.
To further enhance the overall competitiveness of domestic financial institutions, the FSC put forward the Financial Industry Infrastructure Program-Golden Stone Plan, composing 12 elements as follows: enlargement of capital and asset scale, support of tender offer under certain conditions, promotion of product innovation capability, financial talent nurture, clamp-down on cut-throat low price competition, and risk control management. The Plan is now actively implemented, with an aim to bring about the transformation and upgrading and strengthen the constitution of financial institutions.
The financial system is a part of infrastructure that is indispensable to a progressive society. Only through the professionalism and risk control of the financial industry can industry develop and living standard be improved. Accordingly, the FSC will continue to provide an environment conducive to financial industry innovation by further liberalization together with supervisory measures in line with international standards; meanwhile, we will demand that the financial industry attaches importance to risk control and consumer protection; in addition, we encourage the industry to participate in charity activities, so that the financial industry does not just take from the society but gives it back. Our ultimate goal is to generate higher value for the financial industry, the investing public and the Taiwan’s society.