TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
cial) products or services, making it generally impractical to engage in such practices. 2.14 Impact of AML and Sanctions Rules If fintech companies engage in financial servic - es, such as e-payment or robo-advisory, they are subject to the Taiwan AML Act and its associ - ated regulations. Regarding cryptocurrency, the Taiwan AML Act includes VASPs in its anti-money laundering reg - ulatory framework. Under the newly amended Taiwan AML Act as well as the Regulations Gov - erning the Anti-Money Laundering Registration for VASPs (the “Crypto AML Registration Regu- lations” ) which just came into effect at the end of November 2024, VASPs must register with the FSC for AML purposes ( “Crypto AML Registra- tion” ) based on the type of services they offer. VASPs operating without Crypto AML Registra - tion may face criminal liability. Also, to enforce this framework, the FSC issued the Regulations Governing Anti-Money Launder - ing and Countering the Financing of Terrorism for Enterprises Providing Virtual Asset Services (the “Crypto AML Regulations” ), newly amended in 2024. According to the Crypto AML Regulations, VASPs must establish various measures, includ - ing an internal control and audit mechanism, a procedure for reporting suspicious transactions and a know-your-customer procedure. 2.15 Financial Action Task Force Standards In November 2023, the Asia/Pacific Group on Money Laundering (APG) Mutual Evaluation Committee confirmed that Taiwan has retained its “regular follow-up” status. This decision, sup - ported unanimously by APG members, is based on Taiwan’s 2023 follow-up report and extends
its position in the “regular follow-up” category 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. 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 permitted to provide their consulting services, especially the funds (with the nature of securities investment trust funds defined in Tai - wan 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 Business 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 exe- cution” under the Robo-Adviser Rules. However, the Robo-Adviser Rules provide for certain rules regarding “fair and objective imple - mentation” , which require a robo-adviser service provider to faithfully place customers’ interests as its top priority, avoid conflicts of interest, pro - hibit unjust enrichment, provide fair treatment,
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