In an effort to deal with the domestic banking industry's massive overdue loan problem and the related collateral, the Ministry of Finance (
Late Wednesday, the ministry announced a basic capital requirement of NT$5 billion and said qualified foreign financial institutions could control 100 percent of a company's shares.
"Anyone who is interested in establishing an asset management firm can apply to establish a trust company according to the establishment requirements for trust companies," said Vice Minister of Finance Yen Ching-chang (
Recent ministry estimates put the amount of overdue loans in the banking industry at NT$850 billion.
The ministry announced the "establishment requirements for trust companies" (
According to the requirements, the structure of a trust company has to be a limited share company. The minimum capital requirement is NT$5 billion. However, the ministry is permitted to adjust the amount based on financial circumstances.
As for the composition of shareholdings, officials said any individual or his affiliates would not be allowed to hold more than 25 percent of the shares of a trust company. But qualified financial institutions, including banks, insurance companies and fund management companies could be waived from the restriction. This means that any qualified foreign financial institution may hold up to 100 percent of a trust or asset management company's shares, officials said.
The qualifications stipulated in Article 5 of the requirements include the following:
-- Any foreign or domestic financial group with international finance, securities or trust management experience, and its asset or net-worth in the most recent year has been ranked among the top 1,000 banks in the world; or
-- Any insurance company with assets and real estate under its management of no less than NT$20 billion; or
-- Any fund management company with experience in managing international mutual funds and having fund assets of no less than NT$65 billion.
Any company fits the above requirement would be qualified to apply for setting up an asset management company in Taiwan.
In order to secure solid professionalism in the domestic trust industry, the requirements also stipulate that the founding shareholders and other shareholders have to include qualified financial institutions, and total shareholdings of the qualified financial institutions in any trust company has to be no less than 40 percent.
Domestic banks with a license to conduct trust business are also permitted to conduct asset management business, as long as they are qualified and apply for a new license from the ministry, officials said.
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