The Securities and Futures Commission (SFC,
The new rules could be implemented as early as next month. Once in place, brokers, who are authorized by their clients, may buy and sell securities without having to obtain approval for each individual transaction.
According to SFC officials, securities investment trust companies will be required to have NT$300 million in capital in order to offer managed account services to their customers. For securities investment advisory firms or trust companies, the capital requirement is NT$50 million.
As for clients, investors must have between NT$10 million and NT$20 million in their discretionary managed accounts -- up from an originally proposed minimum of NT$5 million.
In order to protect investors, the SFC has decided that securities investment advisory firms can manage no more than five times their capital.
However, if the company has more than NT$300 million in capital, the rule does not apply.
The SFC is scheduled to discuss discretionary managed accounts in further detail this week. Rules could be finalized later this month after public hearings are held.
Other proposed rules include: securities companies must have had a license for at least three years; no punitive action against it in the last two years; no punitive action such as an SFC warning in the last year; and no punitive action from a self-regulating body such as the Securities Investment Trust and Consulting Advisory Association in the last year.
In order to diversify an investors' risk, a securities company may not invest more than 20 percent of a client's account in the shares of a single company.
In addition, no more than 10 percent of a single company's shares can be held in discretionary accounts.
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