Taiwan’s financial regulatory body said that it is opening doors for professional investors to re-entrust investment in foreign crypto-based exchange-traded funds (ETFs).
The country’s Financial Supervisory Commission (FSC) announced the move on 30 September 2024.
“It is recommended that professional investors be allowed to invest in foreign virtual asset ETFs through re-entrustment,” the FSC press release said.
🚨LATEST NEWS: Taiwan's Financial Supervisory Commission has approved $BTC ETFs for professional investors, introducing new regulations and oversight for secure access. pic.twitter.com/oRjsP57GSV
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Unless the client is a professional institutional investor, FSC requires the client to sign a risk warning letter before investing.
“Considering the complex nature of virtual assets and violent price fluctuations, and the high risk of investment in virtual asset ETFs, the principals entrusted by securities firms to buy and sell foreign virtual asset ETFs must be professional investors,” FSC said.
Under the new framework, Taiwanese investors can engage with these ETFs through qualified local financial institutions. These institutions will serve as intermediaries, ensuring that all transactions comply with both domestic and international regulations.
This model aims to provide a secure and regulated environment for investors while expanding their access to global crypto markets.
The FSC has also mandated that securities firms implement a board-approved suitability assessment system.
This system evaluates a client’s understanding and experience with virtual asset ETFs before granting investment access.
Additionally, ongoing education on digital assets is required for business personnel involved in these transactions.
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Taiwan’s Position In Global Crypto Market
The introduction of spot Bitcoin ETFs earlier this year has significantly impacted the market, attracting substantial interest from institutional investors.
These ETFs provide a straightforward method for incorporating Bitcoin into investment portfolios without the complexities of direct purchases and secure storage.
By allowing access to foreign crypto ETFs, Taiwan joins other countries that recognize the growing importance of crypto-based financial products.
This move reflects a broader trend of regulatory bodies worldwide acknowledging the potential benefits of cryptocurrencies while striving to mitigate associated risks.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
