June 2017
The FSC broadened the scope of foreign exchange traded funds brokered by a securities firm for non-professional investors(Taiwan)
2017.3.19
Grace Chiang
The Financial Supervisory Commission (hereinafter, the "FSC") broadened the scope of foreign exchange traded funds brokered by a securities firm for non-professional investors via the Jin-Guan-Zheng-Quan 1060003019 Directive of April 19, 2017 (hereinafter, the "Directive"), which came into effect immediately.
The exchange traded funds (i.e., ETFs) which a securities firm may broker for non-professional investors under Article 1, Paragraph 1, Subparagraph 1 of the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities were previously limited to ETFs which primarily invest in stocks, bonds or commodities (limited to gold) without leveraged or inverse effect. Under the Directive, however, the scope of the ETFs is broadened to include leveraged or inverse ETFs, provided that the multiple of the performance index shall not exceed two and the multiple of the inverse performance index shall not exceed one and any of the following conditions shall be satisfied: (1) a domestic margin account has been established, or (2) orders by the non-professional investor for the trading of at least ten domestic or overseas call / put warrants have been accepted and fulfilled in the past year; or (3) orders by the non-professional investor for the trading of at least ten domestic or overseas futures contracts have been accepted and fulfilled in the past year; or (4) there are records indicating fulfillment of orders by the non-professional investors for the trading of leveraged or inverse ETFs listed in domestic or overseas securities markets.
Grace Chiang
The Financial Supervisory Commission (hereinafter, the "FSC") broadened the scope of foreign exchange traded funds brokered by a securities firm for non-professional investors via the Jin-Guan-Zheng-Quan 1060003019 Directive of April 19, 2017 (hereinafter, the "Directive"), which came into effect immediately.
The exchange traded funds (i.e., ETFs) which a securities firm may broker for non-professional investors under Article 1, Paragraph 1, Subparagraph 1 of the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities were previously limited to ETFs which primarily invest in stocks, bonds or commodities (limited to gold) without leveraged or inverse effect. Under the Directive, however, the scope of the ETFs is broadened to include leveraged or inverse ETFs, provided that the multiple of the performance index shall not exceed two and the multiple of the inverse performance index shall not exceed one and any of the following conditions shall be satisfied: (1) a domestic margin account has been established, or (2) orders by the non-professional investor for the trading of at least ten domestic or overseas call / put warrants have been accepted and fulfilled in the past year; or (3) orders by the non-professional investor for the trading of at least ten domestic or overseas futures contracts have been accepted and fulfilled in the past year; or (4) there are records indicating fulfillment of orders by the non-professional investors for the trading of leveraged or inverse ETFs listed in domestic or overseas securities markets.
