Requirements for the establishment of asset management companies may be drawn up within a week, and the nation could see its first asset management company before the beginning of next year, Ministry of Finance officials said yesterday.
Ministry officials said yesterday that the structure of asset management companies will resemble trust companies. The asset management firms are needed to digest the banking industry's estimated NT$800 billion in bad loans.
"The set-up requirements will be ready in a week at the earliest," said Chen Chung (
Chen said the rules will set out minimum capital requirements and other basic requirements; the regulations will also need to be approved by the Central Bank of China and the Ministry of Justice.
If existing trust companies wish to become an asset management firm and take on bad bank loans, Chen said, the ministry will promulgate the necessary regulations as soon as possible.
Ministry officials said the minimum capital requirement for asset management companies would not exceed NT$10 billion.
Because a trust company is not required to have minimum capital of NT$10 billion -- unlike banks -- the finance ministry is inclined to set the minimum capital requirements for asset management firms between NT$3 billion and NT$5 billion.
The ministry plans to allow trust and asset management companies to operate before relevant tax and trust laws are amended. It will then gradually remove legal barriers to the operation of such companies.
Chen said that any domestic or foreign company will be able to set up an asset management business under the new regulations. Foreign investors will be able to establish a company of their own or partner with local investors.
In addition, the asset management companies will be able to issue shares to raise capital to fund operations, Chen said.
"As to whether the [shares] would be allowed to trade freely on the securities market, this would have to be determined by the Securities and Futures Commission," Chen said.
RSS