The Financial Supervisory Commission (FSC) yesterday said it would adopt a more flexible management mechanism when overseeing fund houses to encourage and reward responsible behavior and discipline.
Huang Tien-mu (黃天牧), director-general of the FSC’s Bureau of Securities and Futures, made the statements after a closed-door meeting between FSC Chairman William Tseng (曾銘宗) and 21 fund houses.
“The commission will remove chairs, not just top executives, of fund houses found of irregularities, while mulling more deregulation to help boost their business,” Huang citied Tseng as saying.
Huang did not elaborate on the differences, but added Tseng frowned on stock manipulations by ING Securities Investment and Trust Co (ING SITC, 安泰投信), the local asset management unit of Dutch financial service provider ING Group, as well as First Securities Investment Trust Co (第一金投信, FSITC), a subsidiary of the state-run First Financial Holding Co (第一金控).
“Well-behaved fund managers will enjoy greater operation flexibility, but unruly ones will be subjected to tighter oversight under the mechanism,” Huang said.
Disciplined fund houses, for instance, may launch several products without the commission’s prior approval, among other benefits, Huang said.
On the other hand, the commission will continue to make the local market more business-friendly for fund managers and investors, Huang said.
To that end, the commission is to exempt offshore funds from the registration and custodian requirements needed to buy foreign currency-denominated bonds and funds in Taiwan.
The regulator will also loosen credit ratings requirements for bond holdings by fund houses.
As of Aug. 31, there were more than 140 asset management companies in Taiwan.