TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
2.6 Jurisdiction of Regulators In Taiwan, the FSC is the government entity responsible for overseeing and regulating all financial products and services. Within the FSC, there are four bureaus: the Banking Bureau (BB), the Securities and Futures Bureau (SFB), the Insurance Bureau (IB) and the Financial Exami - nation Bureau (EB). The BB, SFB and IB each have their own area of authority, that is, bank- ing, securities or insurance, while the EB han - dles financial inspection and audits for all types of institutions regulated by the FSC. At present, there is no designated bureau responsible for overseeing fintech products and services. Con - sequently, the determination as to which bureau should regulate the respective fintech offerings is contingent upon the nature and characteris - tics of the products and services. Also, the Central Bank of the Republic of Chi - na (Taiwan) (the “Central Bank” ) will have the authority if foreign exchange will be involved. 2.7 No-Action Letters In practice, when industry participants face uncertainty regarding laws or regulations, they may seek clarification from regulators. However, the responses provided by the regulators are not considered “no-action” letters. 2.8 Outsourcing of Regulated Functions The regulations governing outsourcing by finan - cial services companies depend on the type of the company. For instance, banks must comply with the Regulations Governing Internal Operat - ing Systems and Procedures for the Outsourc - ing of Financial Institution Operation, which only allow outsourcing of activities specified in those regulations. Some activities may require prior approval from the FSC. Other types of financial services companies (eg, securities firms, insur -
would require the handling fees or other charges for transactions/orders matched, or earn bid-ask spread. 2.4 Variations Between the Regulation of Fintech and Legacy Players There is no single set of regulations govern - ing fintech industry participants. Whether and which specific financial laws and regulations will apply would depend on the business models, the products/services and even the operations of the industry players. 2.5 Regulatory Sandbox Taiwan has implemented a regulatory sandbox framework. The Fintech Development and Inno - vation and Experiment Act (the “Sandbox Act” ) was enacted on 31 January 2018 and came into effect on 30 April 2018. This regulatory sandbox serves as a testing ground for new fintech applications. Under the Sandbox Act, applicants, whether entities or individuals, must obtain approval from the FSC before entering the sandbox for experimenta - tion. Throughout the experimental period, cer - tain legal requirements, such as FSC licensing and specific liability exemptions, may be waived. Upon completion of the approved experiments, the FSC reviews the results. If the results are favourable, the FSC might contemplate revis - ing current financial laws and regulations that impede the adoption of innovative financial practices in practical scenarios. Nevertheless, contingent upon the outcome of the FSC’s eval - uation, the entity or individual from the sandbox could still be obligated to seek pertinent licences or approvals for the formal undertaking of activi - ties previously implemented in the sandbox.
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