Recently, Taiwan has been swept by the 00940 craze, as investment trust companies use internet celebrities to promote ETFs and attract attention. Huang Tien-mu, the chairman of the Financial Supervisory Commission (FSC), stated today that the Investment Trust and Consulting Association is currently discussing the amendment of self-regulatory rules for internet celebrity advertisements. The regulations are expected to be released by the end of June. The FSC will also consider whether virtual asset-specific laws can be applied to this situation.
Background:
Taiwan to Lift Ban on Bitcoin ETFs? FSC: Possible Decision as Early as Next Month
The ETF craze has swept across Taiwan, with the emerging ETF “Yuanta Taiwan High Dividend 00940” attracting significant market attention since its launch. It has sparked various abnormalities such as the discrediting of fixed deposits and mortgaging of properties. The FSC revealed today that the 00940 has raised approximately NT$170 billion, setting a new record. During the subscription period, excessive marketing by internet celebrities has become a social concern.
Regulations on internet celebrity advertisements to be released in June
Huang Tien-mu, the chairman of the FSC, reported and answered questions at the Finance Committee today (18th). According to the Economic Daily News, Kuomintang legislator Lai Shih-bao pointed out at the committee that the Fair Trade Commission had already regulated the handling principles for online advertising cases. False advertising by internet celebrities would be fined between NT$50,000 and NT$25 million. However, the FSC is only now starting to regulate the promotion of financial products by investment trust companies through internet celebrities, raising concerns about the inadequate control of internet celebrity marketing of ETFs by the FSC.
Huang Tien-mu responded that investment trust companies should comply with Article 10 of the Advertising Regulations of the Investment Trust and Consulting Association when delivering paid placement marketing advertisements through internet celebrities and other self-media. The regulations require clear disclosure within the advertisement content, such as sponsorship information from which company, to ensure that it can be clearly identified as advertising and marketing information.
Huang Tien-mu revealed that the Investment Trust and Consulting Association is currently working on enhancing self-regulatory rules for internet celebrity management behavior by investment trust companies and fund sales organizations. The regulations are expected to be finalized by the end of June this year.
Regarding the promotion by internet celebrities that mortgaging houses can be invested in ETFs, Huang Tien-mu stated that this approach is highly risky, and the fluctuation of ETF constituent stocks is not determined by the issuing institution. Past performance does not guarantee future performance.
Will internet celebrity endorsements of virtual assets be regulated?
Furthermore, according to a report by the Central News Agency, Huang Shan-shan, a member of the People First Party, raised concerns during questioning about internet celebrities endorsing not only ETFs but also virtual assets. She asked how the FSC plans to regulate internet celebrity marketing of virtual assets.
Huang Tien-mu responded that the FSC primarily manages virtual asset platforms. At present, there are no regulations that can specifically restrict internet celebrity endorsements of virtual assets. However, the FSC has commissioned external research on virtual asset-specific laws, and it is expected that a draft law will be released after September this year. The FSC will also refer to international practices in considering whether this year’s draft law should address this issue.
Huang Tien-mu stated that virtual assets and ETFs cannot be compared. ETFs are financial products approved by the FSC, while virtual assets are not considered securities. Currently, the FSC mainly regulates virtual assets through the Anti-Money Laundering Act, which authorizes the establishment of measures for virtual currency platforms and transaction businesses to prevent money laundering and combat terrorism financing.
In January of this year, Huang Tien-mu stated that the FSC has started outsourcing research on the feasibility of formulating specific laws for virtual assets, with preliminary results expected to be presented in September. This research will draw on the experiences of other countries to explore how to effectively regulate the scope and depth of virtual asset management.
Further reading:
Taiwan’s Cryptocurrency Specific Law to be Released in September: FSC Conducts Outsourced Research on Regulatory Framework
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