Finance is closely connected to the lives of individuals, business operation and even economic prosperity, social security and national development. However, when people discuss finance, they often fail to see its true face, as if it is covered by a veil; the reason for this is the specialized nature and complexity of finance. Due to the fact that, in essence, finance has both the face of an angel and the devil, and the financial crises that have occurred in the past, people sometimes only see the evil side of finance, neglecting its vital contribution over a long period of time to improving the quality of life of humans and building happy and prosperous societies.
When I took up the post of chairman of the FSC in September, 2017, I hoped, on the foundation laid down by previous chairpersons, to guide the financial industry to bring into play a positive function, therefore, since taking office I have actively worked to strengthen financial industry legal compliance, corporate governance and other related business and, in support of the policies of the current government, channel capital into industrial development. I have also strived to create an environment conducive to the development of the financial technology (FinTech) in line with international trends.
2017 can be described as an important milestone for FinTech development in Taiwan. To respond to international FinTech trends and assist financial institutions in Taiwan face the challenges brought by innovative technology together, the FSC has actively promoted various measures to build an environment conducive to FinTech innovation and development. With the support and efforts of various quarters, the Financial Technology Development and Innovative Experimentation Act became law, becoming the world’s first law regarding financial regulatory sandbox. The FSC has also established the Financial Technology Development and Innovation Center and planned to establish the FinTechBase, with the aim of making Taiwan an innovation base for FinTech R&D and thus increase the competitiveness of Taiwan’s industry and the financial industry and allow the public to enjoy more convenient financial services.
With respect to channeling financial industry funds into real industry, various finance, investment and fund raising. policies have been implemented to promote industrial development and support startups; these include encouraging banks to actively provide loans to startups in key industries, allowing banks to invest in venture capital businesses, easing restrictions on giving loans and fund raising, encouraging insurance firms to invest in startups in key industries, allowing insurance firms to invest in funds established by national level investment companies, and relaxing the TWSE/ TPEx listing requirements for excellent and distinctive companies.
In the area of encouraging financial institutions to expand their international presence, to promote regional economic linkage and development to achieve the dual benefits of increasing the competitiveness of the financial industry and industry in general in Taiwan, the FSC has provided financial support measures in support
of the New Southbound policy; these include reducing red tape and simplification of application procedure to assist Taiwan’s financial institutions increase their presence in New Southbound target countries and continuing to enhance international supervisory cooperation. Diverse funding channels have also been planned; in addition to the increased finance, guarantees and insurance provided by the Export/ Import Bank of the ROC, we also encourage domestic banks to provide credit to Taiwanese businesses in New Southbound target countries to help them obtain the funds needed to develop their business.
In the area of enhancing corporate governance and building a sounder legal compliance environment, to make financial supervision more effective and align with international financial supervisory trends, the FSC has supervised the revision of the governance code of practice for each industry by related financial associations, and added the requirement that independent directors must attend board meetings when major proposals are discussed; the promotion of a differentiated management mechanism also continues, increasing the business scope of financial institutions that perform well with respect to financial affairs and internal control etc., to encourage such institutions to strengthen their operating structure and thus increase the competitiveness of the financial industry overall. Also, to display the importance attached to AML/CLT by Taiwan, in line with the revision of the Money Laundering Control Act, regulations including the Regulations Governing Anti-Money Laundering of Financial Institutions have been successively amended; through advocacy, targeted inspections and interviews with business operators, we also provide guidance to financial business on implementation of AML/CFT mechanisms, with the aim of building excellent capital flow environment and order.
In terms of relaxation of financial regulations, with the aim of increasing capital use efficiency and building an environment beneficial to the nurturing of the competitiveness of Taiwan’s financial industry, while taking into consideration domestic and overseas financial supervisory practice and trends, FSC adjusted the ratio on bank capital requirement to bring it in line with the international standard, raised the upper limit of the multiple of external liabilities and net value of securities firm and raised the limit on investment in public construction by REITs, etc.
The FSC is also making a concerted effort to promote social responsibility, through revision of financial consumer protection laws, introducing the concept of gender equality into policy action and the holding of various charity events by financial peripheral organizations, continuing to plant the concept of sustainable development through the financial industry. In addition, the Green Finance Action Plan formulated by the FSC was approved by the Executive Yuan in November 2017; implementation of this Plan will continue in pursuit of a new economic model based on sustainable development; the FSC also encourages financial institutions to sign the Equator Principles and design green insurance products etc., the aim is to guide Taiwan’s financial industry to make a contribution to global sustainable development.
Only with the financial industry can risk be controlled so that individuals can realize their dreams and social creativity transformed into important products and services to allow the national economy to become more prosperous. Consequently, in the coming year, following the principle of risk control, the FSC will actively work to enhance the competitiveness of Taiwan’s financial industry to provide the capital momentum for industrial development. We will strive to enhance the corporate governance culture and legal compliance of financial institutions in Taiwan, to protect financial consumers and ensure they are treated fairly, urge financial institutions to continue to implement corporate social responsibility and make the social security net more complete, with the aim of building a sound financial environment and implementing financial inclusion, bringing the public and finance closer together. We will also work to vitalize Taiwan’s real economy, stimulate financial innovation and display the essential good of finance so that the financial industry and society can grow side by side.