TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
3. Robo-Advisers 3.1 Requirement for Different Business Models In Taiwan, Robo-Adviser Services are rendered by FSC-licensed SICEs, so the applicable asset classes would be limited to the types for which SICEs are per - mitted to provide their consulting services, especially the funds (with the nature of securities investment trust funds defined in Taiwan law) and exchange- traded funds approved by the FSC. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers As indicated in 3.1 Requirement for Different Busi - ness Models , Robo-Adviser Services are rendered by FSC-licensed SICEs. 3.3 Issues Relating to Best Execution of Customer Trades There is no rule specifically governing “best execu - tion” under the Robo-Adviser Rules. However, the Robo-Adviser Rules provide for certain rules regarding “fair and objective implementation”, which require a Robo-Adviser Service provider to faithfully place customers’ interests as its top priority, avoid conflicts of interest, prohibit unjust enrichment, provide fair treatment, etc as principles. A Robo- Adviser Service provider shall not be involved in any situation that may potentially result in a conflict of interest against its customers in respect of the port - folio-planning process. For example, when the objec - tivity of a robo-adviser’s suggestion is affected by any compensation or interest that such Robo-Adviser Ser - vice provider receives from a product supplier, then such Robo-Adviser Service provider shall ensure that its robo-adviser system is capable of performing the following functions fairly and objectively: (i) determin - ing parameters for the investment portfolios such as investment return, dispersion, credit risk and liquidity risk; (ii) establishing criteria for selection of securi - ties in investment portfolios such as transaction cost, liquidity risk, credit risk, etc; (iii) selecting appropriate securities in investment portfolios; if such securities are selected by algorithms, those algorithms shall be reviewed and audited as well; and (iv) examining whether the default investment portfolio recommen -
2.14 Impact of AML and Sanctions Rules If fintech companies engage in financial services, such as e-payment or robo-advisory, they are subject to the Taiwan AML Act and its associated regulations. Regarding cryptocurrency, the Taiwan AML Act includes VASPs in its anti-money laundering regula - tory framework. Under the newly amended Taiwan AML Act as well as the Regulations Governing the Anti-Money Laundering Registration for VASPs (the “Crypto AML Registration Regulations”) which came into effect at the end of November 2024, VASPs must register with the FSC for AML purposes (“Crypto AML Registration”) based on the type of services they offer. VASPs operating without Crypto AML Registration may face criminal liability. Also, to enforce this framework, the FSC issued the Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises Providing Virtual Asset Services (the “Crypto AML Regulations”), as amended in 2024. According to the Crypto AML Regulations, VASPs must establish vari - ous measures, including an internal control and audit mechanism, a procedure for reporting suspicious transactions and a KYC procedure. 2.15 Financial Action Task Force (FATF) Standards In November 2025, the Asia/Pacific Group on Money Laundering (APG) Mutual Evaluation Committee con - firmed that Taiwan has retained its “regular follow-up” status. This decision, supported unanimously by APG members, is based on Taiwan’s 2023 follow-up report and extends its position in the “regular follow-up” cat - egory since the mutual evaluation in 2019. 2.16 Reverse Solicitation In Taiwan, there is no general exemption for reverse solicitation. As a result, engaging in any regulated business without prior approval or a licence from the FSC may lead to criminal or administrative penalties if the activities are deemed to be conducted within Taiwan.
835 CHAMBERS.COM
Powered by FlippingBook