TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
7.3 Regulatory Distinction Between Funds and Dealers As regards local funds, the most prevalent form of collective investment scheme in Taiwan is securities investment trust funds, which may be either offered to the general public or privately placed with specified individuals. Securities investment trust funds are managed by SITEs, which business may not be carried out without prior approval/licence from the FSC. With respect to dealers, please see 7.2 Require- ment to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity . Given the above, in Taiwan, SITEs and securities dealers are subject to different sets of regula - tions. 7.4 Regulation of Programmers and Programming No regulations have been issued for program - mers who develop and create trading algorithms and other electronic trading tools, assuming such programmers do not carry out any activities that may only be conducted by FSC-licensed finan - cial services entities. However, financial services entities’ purchase and use of the services pro - vided by such programmers might be subject to relevant outsourcing regulations, depending on the individual circumstances.
However, pursuant to the VASP Guidelines, a VASP should ensure that transactions are con - ducted in a fair and transparent manner. Specifically, a VASP should establish mecha - nisms to ensure fair market transactions, includ - ing measures such as abnormal price alerts, as well as regulations to prevent market abuse and avoid conflicts of interest. Also, under the Crypto AML Registration Regu - lations, a VASP offering virtual asset exchange services must establish and publicly disclose its policy for preventing conflicts of interest. Additionally, the VASP is required to implement reasonable measures to protect customer inter - ests and ensure the prompt and fair execution of customer exchange instructions. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations To our knowledge, no regulations have been issued specifically for the creation and usage of technologies regarding high-frequency and algorithmic trading by securities brokers. Secu - rities brokers would be required to have in place internal control systems and risk control systems in line with applicable rules and regulations of the FSC. 7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity Under Taiwan law, no entity may conduct securi - ties dealing as its business unless it has obtained prior approval from the FSC to act as a securities dealer.
8. Insurtech 8.1 Underwriting Processes
In Taiwan, underwriting processes are governed by the Regulations Governing Business Solici - tation, Policy Underwriting and Claim Adjust - ing of Insurance Enterprises (the “Underwriting Regulations” ). According to the Underwriting
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