Fundraising through security token offerings (STOs) would be approved starting from October at the earliest, which would particularly benefit start-ups, the Financial Supervisory Commission (FSC) said yesterday.
The STO regulations are to be a world first, as most of the commission’s foreign counterparts require STOs to comply with existing securities laws, FSC Chairman Wellington Koo (顧立雄) said.
“It was not easy to establish a set of regulations, considering there was little to reference in other nations. We needed to balance consumer protection and industrial growth, and curb market volatility,” Koo told a news conference in New Taipei City.
Although the regulations might not please everyone, they are the best version the commission could think of, he said, adding that the rules would be open to public comment for two months.
A securities token is a kind of virtual currency. Unlike bitcoin, which has no central issuer and can only be created through a process called “mining,” securities tokens are launched by companies that wish to raise funds.
The commission did not change a NT$30 million (US$964,599) fundraising limit stipulated in the draft regulation, although the funds would be exempted from some administrative requirements.
Companies wishing to raise more funds would need to apply to run an experiment in the regulatory sandbox.
However, the commission loosened restrictions on investors by allowing them to purchase NT$300,000 in securities tokens for a single project, up from the previously proposed NT$100,000, based on investors’ opinions shared during a public hearing, Koo said.
To prevent investors from manipulating token prices, the number of tokens traded per day may not exceed half of the total number of issued tokens, Koo said.
Privately held companies registered in Taiwan would be allowed to conduct STOs, whether local or foreign, while listed companies cannot, as they already have other fundraising tools, he said.
The commission has not yet received any STO applications, but start-ups are expected to show interest, as they have fewer fundraising tools, Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told the Taipei Times.
Companies would not be permitted to issue tokens on more than one exchange, which is responsible for checking issuers’ qualifications and overseeing their white papers, Koo said.
Exchanges that wish to launch their own securities tokens would be monitored by the Taipei Exchange, Koo said.
Only exchanges with paid-in capital of more than NT$100 million could issue STOs after obtaining a securities dealer license, although they may only help companies conduct one STO per year and the cumulative funds raised may not exceed NT$100 million, the commission said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
Taipei 101, one of the nation’s leading shopping centers, is planning to reduce its business hours due to decreased demand amid the COVID-19 pandemic. Taipei 101 is to open daily at noon and close at 9pm from April 6, building management said in a statement on Monday. The shopping center has been opening at 11am and closing at 9:30pm from Sunday to Thursday, while closing at 10pm on Friday and Saturday. The restaurants in the food court — on the basement level — would adjust their business hours as necessary, but the supermarket would continue to open at 9am daily, management said. The shopping