FINRAThe Financial Industry Regulatory Authority

The Securities and Futures Bureau (SFB), established in 2004, is one of Taiwan's key regulatory authorities responsible for policy-making, regulation, and development of Taiwan's capital markets under the direction of the Financial Supervisory Commission (FSC) of Taiwan.

The SFB's primary objectives are to facilitate Taiwan's national economic growth, ensure and maintain the sound developmental direction of securities and futures markets, promote fair trading in these markets, and safeguard the rights and interests of both investors and traders.

The SFB has essential responsibilities to create and maintain financial policies, laws, and regulations, as well as to supervise domestic and international activities in the capital markets.

As the executive unit for the FSC, the SFB is focused on establishing a competitive, transparent, and innovation-oriented financial environment, enabling investors, companies, and financial institutions to operate with confidence in a well-regulated financial system.

Scope of Supervision and Responsibilities

The SFB is responsible for the supervision of a wide variety of areas in Taiwan's financial market, including:

• Overseeing companies that access the capital markets, including supervising public companies in all their offerings, issuing, listing, and over-the-counter (OTC) trading of securities.

• Reviewing and approving futures trading contracts to ensure the products are suitable and that fair trade exists.

• Overseeing securities and futures enterprises to increase market integrity and improve competitiveness.

• Regulating foreign investment in Taiwan's capital markets, ensuring there are transparent frameworks for cross-border activities.

• Overseeing securities and futures industry associations and related foundations for alignment with market standards.

• Managing investment trust funds and margin trading to better safeguard the interests of investors.

• Oversight of the auditing and attestation of audited financial reports of listed companies by certified public accountants (CPAs) to ensure greater financial accountability, transparency, and market confidence.

• Protecting the rights of investors and traders at all financial levels.

The SFB can ensure orderly market functions, market equality, and trust, while also still being strategically beneficial, through its full cycle of regulation—prior, during, and post-market activity.

Responding to Globalization and Innovation

As both globalization and financial innovation continue to shape the landscape of various international markets, the SFB has adopted a proactive and nimble posture.

By maintaining close contact with global market trends, collaborating with foreign regulators, and making regular trips and outreach to various stakeholders in Taiwan, the SFB strives to ensure that Taiwan's capital markets remain leaders in a competitive global environment.

The SFB has made it a point to regularly update and inform investors and market participants on new regulations, market statistics, and supervisory regulations, to help keep them adapted and resilient.

Strategic Policies and Key Initiatives

The SFB's strategic map calls for strengthening Taiwan's capital markets to compete effectively in a global and increasingly regulated landscape.The SFB identified five core themes:

1.Strengthening Direct Financing

Numerous businesses faced significant cash shortages during the pandemic, as COVID-19 had a profound impact on both the private and public sectors.To address the issue of financing shortages, the SFB has focused on providing uniformly smooth funding channels, enabling all stakeholders, notably small and medium-sized enterprises (SMEs) and startup businesses, to monetize opportunities for fundraising in a more streamlined, efficient, and dependable manner.

The Bureau aims to leverage Taiwan's abundant domestic capital to enhance corporate competitiveness and foster genuine economic growth.

2.Improving Corporate Governance and ESG Forensic Practice

As the world has changed, the Bureau has instituted the Corporate Governance Roadmap 3.0 for sustainable development, which provides strategies for:

• Improving transparency on environmental, social, and governance (ESG) equity.

• Encouraging English disclosures that enhance foreign communications.

• Encouraging institutional investors to participate in corporate governance.

• Expanding and deepening green finance and other sustainable financial products to strengthen the competitiveness and resiliency of Taiwan's capital markets.

3.Empowering Financial Institutions and Capital Market Stability

The Bureau works to enhance the areas of securities and futures enterprises by increasing the investment banking services they provide, enabling them to finance corporate growth, technologies, and develop fintech solutions that drive innovation and market development.

4.Expansion of Financial Products and Services

The Bureau promotes innovative trading systems to enhance overall global competitiveness and support the development of new financial products.

Some required measures include:

• Central counterparty clearing house (CCP) to settle over-the-counter derivatives.

• Real estate securitization.

• Asset management businesses with distinctiveness for international markets.

5.Improving Audit Transparency and Quality

To enhance public trust and promote corporate accountability, the Bureau supports the development and adoption of Audit Quality Indicators (AQIs) as a means to improve audit practice transparency, auditing supervisory efficiency, and the quality of auditing practices in Taiwan's capital markets.

The Securities and Futures Bureau plays a crucial role in establishing Taiwan's capital markets, promoting innovation, sustainability, and enhancing capital market competitiveness.

Utilizing their strategic public policies and innovative governance approach, the Bureau continues to foster a vibrant, inclusive, and data-driven environment.This approach bridges Taiwan's capital markets with global governance.