The Financial Supervisory Commission (FSC) yesterday announced plans to ease regulations that would allow venture capital subsidiaries of financial holding companies to increase stakes in firms in creative industries.
The upcoming liberalization is another bid by the commission to help boost the nation’s creative industries, as their counterparts in South Korea and China are gaining popularity and bringing in significant tourism revenues for those nations.
Under the regulatory easing, the venture capital units of domestic financial service providers could increase investment to NT$150 million (US$4.96 million) in firms engaged in creative industries, triple the current NT$50 million limit.
The existing restriction aims to prevent financial companies from owning heavy stakes in non-financial firms, especially in printing, broadcasting and other media businesses.
The commission also bars financial firms from controlling more than a 15 percent stake in individual invested companies.
Now the commission has said it is to free venture capital arms of financial conglomerates from the 15 percent cap, meaning that other subsidiaries cannot take part in the regulatory easing, according to a statement on its Web site.
The deregulation would not extend to printing, broadcasting and other media companies on concerns about heavy connections between the financial and media industries, the commission said.
That means that financial service providers may not invest more than NT$50 million or own more than 15 percent shares in media companies, the commission.
The deregulation is to take effect in about two weeks.
The financial regulator has encouraged local banks to support firms in creative industries, despite the difficulty of evaluating their assets.
As of last month, outstanding loans to the sector totaled NT$235 billion, up NT$53.3 billion from December last year and already surpassing the NT$50 billion goal set for the entire year, the commission said.
In a related development, the commission has allowed overseas banking branches to use looser requirements for mortgage operations abroad, in line with international standards.
Foreign branches of Taiwanese banks may use capital-to-risk ratios of 35 percent when processing mortgages overseas, compared with 45 percent for self-occupancy home loans and 100 percent for non-self-occupancy lending in Taiwan.
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