Taiwan FSC tightens securities dealers’ private investment controls

Taiwan’s Financial Supervisory Commission order applies immediately to securities dealers purchasing specified private-placement securities, new shares, convertible bonds and other listed categories. It replaces the FSC’s 23 April 2025 order and sets investment ceilings, reporting duties and control requirements under Article 15, Subparagraph 2 of the Securities and Exchange Act.

Eight permitted investment categories

Taiwan Financial Supervisory Commission Order Jin-Guan-Securities-Zi No. 1150356483, 6 October 2026, Taiwan

The order permits eight categories of investment. They include privately placed securities, certain privately placed beneficiary and asset-backed securities, new shares issued by unlisted public companies, pre-listing shares sold by competitive auction, competitively auctioned convertible corporate bonds and publicly solicited unlisted shares.

Categories seven and eight have a narrower population. Only integrated securities firms that simultaneously operate brokerage, underwriting and proprietary trading businesses may purchase them. Those categories cover new shares issued by companies registered on the Taipei Exchange’s Go Incubation Board and new shares issued by domestic or foreign issuers pursuing an Innovation Board listing while being guided by the dealer as lead underwriter.

Limits, approvals and records

Purchases from any one company may not exceed 5 per cent of the dealer’s net worth, while total purchases under the order may not exceed 10 per cent. Holdings under categories seven and eight may each not exceed 5 per cent of net worth. Purchases from any one company may not exceed 10 per cent of that company’s single issuance or total issued amount, although that issuance limit does not apply to categories seven and eight. The purchases must also comply with Article 18, Paragraph 2 of the Regulations Governing Securities Firms.

The latest capital adequacy ratio, calculated after adding the proposed investment, may not fall below 200 per cent. The investment decision must follow the dealer’s proprietary-trading procedures, and the investment details must be entered into the Securities Firm Single Window for Reporting within two days of the relevant event.

Transactions reaching the information-disclosure thresholds under Chapter III of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies require board approval and the relevant announcements, reports and disclosures. Purchases must not violate normal trading practices or affect sound financial or business operations. The FSC requires enhanced internal-audit checks covering compliance with the order.

For categories seven and eight, the board must approve the types and scope of eligible investments. Before purchase, the dealer must obtain the target company’s latest financial statements, audited or reviewed by a certified public accountant, as a reference for assessing price. A related-party transaction also requires either a professional appraisal report or a certified public accountant’s opinion on price reasonableness.

The order preserves a separate restriction for firms combining proprietary trading and underwriting. Those firms must comply with Article 84 of the Securities and Exchange Act and may not participate in the competitive auction for an Emerging Stock Market company’s capital-increase shares where the firm acts as recommending securities dealer and the sale forms part of an initial public offering for listing.

The FSC order took effect on 6 October 2026 and repealed the 23 April 2025 order.

The official 6 October 2026 FSC order is the record to monitor; it identifies no subsequent docket, response or implementation event.