Taiwan is preparing to launch its first active exchange-traded fund. The move comes two months after releasing the policy to introduce more innovative ETFs as part of its bid to develop the island into a regional asset management hub.
The Financial Supervisory Commission (FSC) says it has amended existing ETF rules in trading, delisting, suspension and trading fees to pave the way for the listing of active ETFs.
The financial regulator estimates the amendment process will take approximately 60 days for approvals.
The FSC’s previous consultation shows that 15 of Taiwan’s 68 asset managers are expected to launch active ETFs. The FSC expects the first batch of active ETFs will come to the market as early as the second quarter of 2025 and estimates the active ETF market could reach up to NT$200 billion (US$6.28 billion) by 2026.
Active ETFs will be available for trading on the Taiwan stock exchange, and the Taipei exchange’s over-the-counter market. The funds can be used for various purposes such as hedging and securities lending, but they must have “active” in the official names, according to the FSC.
“The FSC has decided to open up the market because of the fast-growing active ETF markets overseas,” the regulator says.
Active ETFs invest in a portfolio of securities that are selected by asset managers for specific purposes, unlike traditional or passive ETFs which track the underlying index.
According to BlackRock Inc, the global active ETF market is projected to grow from $23 billion in 2023 to $4 trillion by 2030.
