The Executive Yuan yesterday approved a draft act to allow fintech businesses to test their services and exempt them from legal restrictions for up to 18 months, a move expected to boost the nation’s fintech innovations.
The bill is now awaiting approval by the legislature.
The draft act would set up a “regulatory sandbox,” which would provide fintech businesses with an environment that allows them to experiment with new financial products and services through legal exemptions, with a few exceptions.
Businesses expected to apply for the program include providers of digital insurance services, peer-to-peer lending, blockchain technology, identification verification technology, big data analytics, third-party payment systems and backend management systems, Financial Supervisory Commission Vice Chairman Cheng Cheng-mount (鄭貞茂) said.
Businesses will be allowed to test their innovations in the “sandbox” for one year with an extension period of six months, Cheng said.
To qualify, services and technologies should either improve the efficiency of financial services, lower operating cost or enhance consumer rights, he said.
Authorities would review the experiments and help develop business opportunities for promising innovations, or revise regulatory frameworks to accommodate new forms of financial services, he added.
The proposed “sandbox” protections do not exempt companies from money-laundering and consumer protection laws, and fintech businesses, especially providers of international third-party payment service, have to make sure that their operations are in full compliance with those laws, Cheng said.
Start-ups interested in providing foreign-exchange services should seek permission from the central bank, Cheng added.
“Innovative financial technologies could be a major driver of the financial industry, as well as other sectors, and Taiwan cannot afford to fall behind other countries in the development of financial technology, or it would risk its competitiveness and overall industrial development,” Premier Lin Chuan (林全) said.
Lin asked the commission to communicate with legislators to ensure a swift passage of the draft act.
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