The legislature’s Finance Committee on Wednesday passed a preliminary review of a draft bill for a “regulatory sandbox” for developers to experiment with new financial products and services, while being exempt from some regulations and liabilities during the trial period.
The planned regulatory sandbox allows developers to extend their experiments to as long as 36 months, the longest in the world among nations with similar initiatives.
The UK gives developers between three and six months to conduct experiments, while Singapore gives between six and nine months, and Australia gives 12 months.
Experiments in the regulatory sandbox are expected to begin in the second half of next year, Finance Committee members said.
“The progress in the legislature was a real shot in the arm for developers; we are much more optimistic on future prospects,” Robo Web Tech founder and CEO Joanna Yang (楊瑞芬) said at a fintech forum in Taipei yesterday.
One of the main topics at this year’s APEC summit in Vietnam is helping the region’s small and medium-sized enterprises (SMEs) transition into the digital economy, where fintech plays a crucial role, Yang said.
Fintech could help transform one of Taiwan’s SMEs into the nation’s first “unicorn” — a start up that is valued at more than US$1 billion — in the next three to five years, she said.
Taiwan’s world-leading experimentation time frame was designed to help developers cope with policy uncertainty while related sublaws are awaiting draft, Democratic Progressive Party (DPP) Legislator Karen Yu (余宛如) said.
It is hoped that the longer experimentation period would allow enough time for legislation to keep pace with innovation and prevent obstacles to the commercialization of new ideas, Yu said.
While industry experts have responded favorably to the government’s efforts at fostering innovations in fintech, Taiwan’s start-up ecosystem is still facing lingering obstacles, such as slow legislation, policy uncertainties and access to capital.
Taiwan Mergers & Acquisitions and Private Equity Council (台灣併購與私募協會) president Huang Chi-yuan (黃齊元) said Taiwan’s regulators remain fixated on protecting consumers, and many rules protect the current financial sector, which is overcrowded with low-yield lenders.
The rise of Chinese technology giants cannot be denied; they are beginning to play a larger role in the start-up ecosystem, Huang said.
Initial public offerings are no longer the main source of funding for start ups, as more investments are conducted directly through venture capital and private equity firms, as well as via merger and acquisition deals, Huang said.