In recent weeks, there has been a surge of interest in ETFs (Exchange-Traded Funds) in Taiwan, with investment trust companies using internet influencers to promote them. Huang Tien-mu, the Chairman of the Financial Supervisory Commission (FSC), has stated that the Investment Trust and Consulting Association is currently considering revising the self-regulation guidelines for internet influencer advertising, and these guidelines are expected to be released by the end of June. The FSC is also considering whether virtual assets should be regulated under specialized legislation.
The ETF frenzy in Taiwan has attracted significant attention, particularly with the emergence of the new ETF “Yuanta Taiwan High Dividend Yield Value ETF 00940,” which has sparked various anomalies such as claims of beating fixed deposits and using mortgaged properties. The FSC revealed today that the fund size of 00940 has reached approximately NT$170 billion, setting a new record. During the subscription period, excessive marketing by internet influencers has also become a focal point of societal concern.
During a special report to the Legislative Yuan’s Finance Committee on June 18, Chairman Huang responded to questions from Kuomintang legislator Lai Shih-bao. Lai raised concerns about the FSC’s lack of effective regulation on internet influencer marketing of financial products, noting that the Fair Trade Commission had already established regulations and penalties for false online advertising, with fines ranging from NT$50,000 to NT$25 million.
Huang stated that investment trust companies should comply with the Advertising Guidelines for Investment Trust and Consulting Association, which require clear disclosure in advertisements sponsored by companies, clearly indicating that they are marketing materials. Huang also revealed that the Investment Trust and Consulting Association is currently working on enhancing self-regulation guidelines for managing internet influencers’ behavior in the investment trust industry and fund sales institutions, with the aim of finalizing these guidelines by the end of June.
Regarding the promotion of using mortgaged houses to invest in ETFs by internet influencers, Huang emphasized the high risks associated with this approach. He also noted that the performance of ETF component stocks is not determined by the issuing institution, and past performance does not guarantee future performance.
Another concern raised during the questioning by People First Party legislator Huang Shan-shan was the endorsement of virtual assets by internet influencers. Huang asked how the FSC plans to regulate internet influencer marketing of virtual assets. Huang responded that the FSC currently focuses on regulating virtual asset platforms and does not have regulations in place to govern internet influencer endorsements of virtual assets. However, the FSC has outsourced research on specialized legislation for virtual assets and expects to present a draft bill after September this year, taking into account international practices and considering whether the proposed legislation should address this issue.
Huang stated that virtual assets and ETFs cannot be directly compared, as ETFs are approved financial products regulated by the FSC, while virtual assets are not considered securities. The FSC’s current management of virtual assets primarily involves the enforcement of anti-money laundering laws through authorized virtual currency platforms and transaction businesses.
In January of this year, Huang announced that the FSC had begun outsourcing research on the feasibility of establishing specialized legislation for virtual assets. Preliminary results are expected to be presented in September. This research will draw on the experiences of other countries to explore more effective regulation of the scope and depth of virtual asset management.
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