The Financial Supervisory Commission (FSC) on Thursday said it is launching new wealth management rules that would allow eligible banks to offer their high-asset customers new financial products and services next quarter.
The new rules, part of the Regulations Governing Banks Conducting Financial Products and Services for High-Asset Customers (銀行辦理高資產客戶適用之金融商品及服務管理辦法), would take effect after a 60-day notice, FSC Chairman Wellington Koo (顧立雄) said.
“We will collect opinions from banks or relevant institutions during this period. Meanwhile, 60 days should be enough for the banks to prepare to kick-start new services,” Koo said.
BIGGER RISK
As the new financial products generate higher investment risks, only banks with solid financials, large-scale management services and good corporate governance would qualify, Koo added.
The FSC requires qualifying banks to maintain a minimum common equity Tier-1 ratio of 9.5 percent, a minimum Tier-1 capital ratio of 11 percent and a capital adequacy ratio no less than 13 percent in total, he said.
The banks’ aggregate amount of investable client assets must be equal to or higher than NT$300 billion (US$9.87 billion), while their outstanding balance in trust and over-the-counter structured products minus securities under custody must be equal to or higher than NT$150 billion, Koo said.
Banks that have been fined for breaching regulations are not eligible to apply for the program, he said.
After the 60-day notice, the FSC would announce the list of eligible banks, he said.
High-asset customers are defined as having more than NT$100 million, similar to private banks in Hong Kong, Koo said.
CLIENT COMMUNICATION
Under the new regulations, participating banks must discuss risks with their clients in person or through videoconferencing, and confirm that they understand the risks before selling them the new products, he said.
The new program permits banks to provide eight new financial products or services, such as foreign-currency-denominated structured notes and derivatives linked to the TAIEX or other index in the local equity market, the commission’s data showed.
Last year, Koo said that the new rules would help banks expand their wealth management services to compete with Hong Kong and Singapore, with the former’s financial-hub status showing weakness in the months since pro-democracy protests started in June last year.
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