Taiwan Regulator Greenlights Foreign Crypto ETFs for Professional Investors

Taiwan’s Financial Supervisory Commission (FSC) has introduced a new policy allowing professional investors to invest in foreign crypto exchange-traded funds (ETFs) using a re-entrustment method. This re-entrustment method will enable professional investors to delegate their investment decisions or management to another party, such as a securities firm.

Diversifying Product Offerings

According to FSC, the latest initiative is part of its effort to diversify product offerings and boost the re-entrustment business of the nation’s securities firms.

As stated in a press release, only professional investors, like high-net-worth individuals, high-asset clients, investment funds, and qualified natural persons, can access these foreign ETFs due to the high investment risks associated with the funds.

“Considering the complex nature of virtual assets and violent price fluctuations, and the high risk of investment in virtual asset ETFs, the principals entrusted by securities firms to buy and sell foreign virtual asset ETFs must be professional investors,” the regulator said.

The FSC requires securities firms to establish a crypto ETF product suitability system, approved by the board of directors, to evaluate whether the client has the necessary expertise and experience with crypto and related products before making any initial investment.

The agency also mandates that securities firms provide regular education and training to their staff on crypto assets and related products. This move aims to ensure business personnel fully understand these products and effectively guide clients through investment.

The regulator shared that it will continue to monitor the implementation of these measures to protect investor interests while increasing the competitiveness of Taiwan’s securities firms.

Growing Demand for Crypto

Taiwan has joined the growing number of countries recognizing the demand for crypto-linked investment products. Earlier this year, the East Asian country announced plans to introduce a regulatory framework for cryptocurrencies, driven by rising concerns over fraudulent activities in the sector.

Meanwhile, other countries, such as the United States, El Salvador, the United Kingdom, and Australia, have made moves to expand the adoption of crypto assets like Bitcoin.