Taiwan Approves Foreign Crypto ETFs for Professional Investors

• Taiwan’s FSC has created a new policy for crypto ETFs.
• Professional investors will now be allowed access to overseas funds.
• The regulator is keen to introduce improved regulations to bolster the foreign crypto ETF business.

Taiwan’s Financial Supervisory Commission (FSC) has allowed professional investors to obtain exposure to foreign crypto exchange-traded funds (ETFs), provided they meet certain conditions.

The move came nearly six months after FSC chairman Huang Tianmu slammed cryptocurrencies in March, noting that their emergence had “nothing” to do with the real economy. Today’s development suggests the regulator has shifted from its previous stance but with great caution amid volatility concerns.

Taiwan’s Policy on Overseas Crypto ETFs

In a statement on September 30, the FSC said it created the new policy after consulting the Securities Business Association of the Republic of China to assess the “relatively high” investment risks of crypto ETFs.  

The consultation recommended that access to overseas digital asset ETFs would be limited to professional investors, including high-net-worth individuals, institutions, high-asset clients, and legal persons or funds designated as qualified investors.

Per the statement, security firms must establish suitability assessments for crypto ETFs and seek approval from the board of directors before offering the products based on a client’s professional knowledge of digital assets and the level of investment.

Additionally, security firms are required to provide adequate product information and obtain a signed risk warning letter from clients before allowing investors to make initial purchases of the ETFs.

“Securities firms should provide regular education and training on virtual assets and related products to business personnel, so that business personnel can fully understand the products,” the statement read.

The SFC said it would continue to monitor security firms’ handling of foreign crypto ETF business and strengthen regulations to ensure investor protection and fair competition in the industry.

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