According to the latest announcement, the Financial Supervisory Commission has approved the opening of entrusted investment in foreign virtual asset ETFs. However, considering the higher investment risks associated with virtual asset ETFs, and in reference to the suggestions from the industry association, initially only "professional investors" will be allowed to invest in foreign virtual asset ETFs through entrusted means, with further observation and rolling review to follow. The Financial Supervisory Commission stated in the announcement:
"To provide investors with a diverse selection of products and to enhance the momentum of our securities firms' entrusted business, while considering the higher investment risks associated with foreign virtual asset ETFs, the Financial Supervisory Commission (hereinafter referred to as the FSC) has adopted the suggestions of the Securities Association of the Republic of China and opened up the ability for professional investors to invest in foreign virtual asset ETFs through entrusted means."
The FSC pointed out that this opening includes the following five key points:
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Investor identity: Considering the complex nature of virtual assets and their significant price volatility, the investment risks of virtual asset ETFs are high. Securities firms are limited to accepting professional investors as clients for the entrusted trading of foreign virtual asset ETFs. Professional investors include professional institutional investors, high-net-worth investment entities, high-asset clients, entities or funds that qualify as professional investors, and individuals who qualify as professional investors.
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Strengthening customer understanding procedures: Securities firms should establish an appropriate suitability system for virtual asset ETF products, which must be approved by the board of directors. They should assess the client's professional knowledge of virtual assets and related products and ensure they have a certain level of investment experience before the client makes their initial purchase, to understand the suitability of the client's entrusted trading of the product.
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Signing a risk disclosure statement: Except for professional institutional investors, clients must sign a risk disclosure statement before their initial purchase, after which the securities firm may accept their entrusted trading.
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Providing product information: Except for professional institutional investors, securities firms must provide relevant product information about virtual asset ETFs to clients before their initial purchase.
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Regular education and training: Securities firms should regularly conduct education and training for their staff on virtual assets and related products to ensure that staff fully understand the product.
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