Taiwan’s Financial Supervisory Commission (FSC) has taken a bold step by approving foreign crypto exchange-traded funds (ETFs) for professional investors, a move announced on September 30, 2024.
This decision allows institutional investors, including high-net-worth individuals and specific investment firms, to access these ETFs through a regulated re-entrustment process, which involves delegating investment management to third parties for enhanced oversight.
The FSC’s approval comes after thorough discussions with the Securities Business Association to address potential risks associated with digital assets.
To ensure investor protection, several conditions have been set, including the establishment of a “suitability system,” risk disclosures, and mandatory risk warnings for investors.
This framework aims to promote compliance and risk management while allowing Taiwanese institutions to engage with global crypto markets.
As Taiwan embraces digital assets, it contrasts with the more cautious approaches seen in other Asian regions, such as South Korea and Japan, where regulators are still evaluating the implications of crypto ETFs. Nonetheless, interest in digital assets is growing among some Japanese institutional investors, indicating a shift in attitudes within the region.
