FSC in Taiwan to bring in measure to encourage fund consolidation
30 September 2013
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.
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