FSC in Taiwan to bring in measure to encourage fund consolidation
30 September 2013
Category: News, Taiwan
By Asia Asset Management
Taiwan’s Financial Supervisory Commission (FSC) is poised to revise the ‘Regulation Governing Securities Investment Trust Funds’ regulation in order to encourage mergers between small-sized funds, according to Economic Daily News.
About 166 out of Taiwan’s 627 domestic mutual funds have AUM of less than NT$500 million (US$16.6 million).
Wu Quei-mao, chief secretary of the FSC’s Futures and Securities Bureau, tells local media that the administrative costs of small-size funds can be brought down through mergers and consolidations.
Under the initiative, mergers between funds with AUMs of less than NT$500 million are exempted from convening beneficiary meetings. Instead, fund managers can directly submit merger applications to the FSC.
Meanwhile, the FSC has raised the threshold on small-size funds from NT$300 million to NT$500 million in order to increase the scheme’s coverage.
Furthermore, Mr. Wu stated that under current regulations, only funds with underlying investments within a single region are allowed to consolidate. The amended regulation will remove this restriction.
The new regulations will come into force on October 1.