The Financial Supervisory Commission (FSC) yesterday said it would take a cautious approach toward implementation of securities token offerings (STOs), as it plans to introduce new laws by June to address the growing popularity of virtual currencies.
Interested parties might be allowed to raise up to NT$30 million (US$973,489) through STOs, but blockchain-based tokens would not be allowed as equities, the commission said.
A securities token is a kind of virtual currency. Unlike bitcoin, which has no central issuer and can only be released through a process called “mining,” securities tokens are launched by companies aiming to raise funds.
“The securities tokens are issued in foreign countries as digital assets based on blockchain technology,” Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told the Taipei Times by telephone.
“So far, holders of securities tokens enjoy certain ownership in the issuing companies and can receive dividends as if they are investing in stocks,” Tsai said.
“They can also receive interest payments from the sale of securities tokens as with corporate bonds,” she said.
As securities tokens possess securities-like attributes, their issuance would be subject to traditional securities regulations, she said.
However, the commission initially would only permit securities tokens to offer interest payments as bonds and would require the issuers to clearly state how many they plan to distribute, Tsai said.
The commission would prohibit companies from offering equities-like tokens, as such practice is more strictly regulated by the Company Act (公司法), she said.
“The offering of equities-like tokens are possible, but we prefer a step-by-step approach to see how STOs do first,” Tsai said.
The commission’s threshold of NT$30 million for fundraising followed discussions with several parties interested in STOs, Tsai said, adding that the amount should be enough for start-ups, or small or medium-sized enterprises.
Unlike an initial public offering, STOs would be exempted from some administrative requirements and could proceed much faster, Tsai said.
As for companies that intend to raise more than NT$30 million through an STO, they would have to run experiments in a regulatory sandbox so the commission could carefully monitor the risks, Tsai said, adding that sandbox investments would be limited to NT$200 million.
“So far, more than one company has expressed interest in running a sandbox experiment to provide virtual-currency services, but not everyone plans to launch an STO, a new investment tool that began to emerge in the second half of last year,” Department of Planning Director-General Lin Chih-chi (林志吉) said.
Maicoin (現代財富科技), a local platform for virtual currencies, has expressed an interest in an STO, Lin said.
The commission would counsel the firm before accepting its formal application, he said.
The commission would establish an independent platform for the trade of security tokens that is different from the Taiwan Stock Exchange or the Taipei Exchange, it said.
The commission said that plans to issue special licenses to companies operating virtual currencies, which would require special software to accept sell and buy orders.
However, the commission still has many issues to resolve, such as whether tokens should be standardized, or if tokens should be secured by collateral.
“We have outlined our strategy, but there is more to be discussed,” Tsai said, adding that the commission has invited private-sector parties to a forum next week to discuss the proposed regulations in detail.
STEADY: Prices are to rebound following inventory rebuilding demand, TrendForce said, with Samsung Electronics Co further trimming capacity as it slashes DDR4 lines The contract prices of DRAM chips are to rise by as much as 18 percent sequentially this quarter — the first price upticks in about eight quarters — driven mainly by inventory rebuilding demand for DRAM chips used in mobile devices and PCs, TrendForce Corp (集邦科技) projected yesterday. The price rebound is led by a quarterly increase of mobile DRAM chips, which are to climb between 13 percent and 18 percent quarter-on-quarter this quarter, which has not been seen since the fourth quarter of 2021, the Taipei-based market researcher predicted. Likewise, the price of mainstream PC DDR4 DRAM is expected to bounce
CHINA NOT A FRIEND: ‘Newsflash: Democracy is good for your businesses,’ US Secretary of Commerce Gina Raimondo said as she gave a speech at a national defense forum US Secretary of Commerce Gina Raimondo on Saturday urged lawmakers, Silicon Valley and US allies to stop China from getting semiconductors and cutting-edge technologies key to national security. Speaking at an annual national defense forum in Simi Valley, California, Raimondo called Beijing “the biggest threat we’ve ever had” and stressed that “China is not our friend.” The world’s top two economies are locked in a fierce commercial and geopolitical rivalry, in which her department plays a leading role. In October, Raimondo unveiled a series of restrictions on the export of advanced chips to China, including those used in the development of artificial intelligence
A Hong Kong court postponed a court hearing on troubled Chinese property developer Evergrande Group’s (恆大集團) winding-up petition scheduled for yesterday until Jan. 29. Evergrande is trying to win support from its creditors for a plan to restructure more than US$300 billion in debt to stave off liquidation. The company’s lawyer told the court it was requesting an adjournment to “refine” its new debt restructuring plan. The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times. Judge Linda Chan (陳靜芬) had said in October that yesterday’s hearing would be the last before a decision is handed down. Chan
SOLID FOUNDATION: Given its decades of expertise in megatronics, manufacturing and robotics, Japan has the wherewithal to create its own AI, Jensen Huang said Nvidia Corp plans to help build an artificial intelligence (AI) tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in this emerging technology. The US company will seek to partner with Japanese research organizations, companies and start-ups to build factories for AI, Nvidia CEO Jensen Huang (黃仁勳) said yesterday during opening remarks in a meeting with Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura. The company is to set up an AI research laboratory, and invest in local start-ups and educate the public on using AI, Huang said. Huang earlier this week met with Japanese Prime