In order to cooperate with the implementation of the "Virtual Asset Services Law", the Financial Supervisory Commission has developed 9 sub-laws. Among them, 8 are authorization regulations and orders related to the management of virtual asset service providers VASP, including: covering business establishment licensing, responsible persons and business personnel management, business and financial management, internal control, operation outsourcing, management of suspected illegal accounts or transactions, financial report preparation and trade association management, etc.; another one is related to stable currency. The Financial Supervisory Commission said it will make an announcement in the near future to solicit opinions from all parties.
Huang Zhonghao, deputy director of the Securities and Futures Bureau of the Financial Supervisory Commission, said that the "Virtual Asset Services Act" was announced by the president on July 22 this year, and the implementation date will be determined by the Executive Yuan. In order to cooperate with the implementation of the law and with reference to international supervision trends and my country's market practices, a draft authorization sub-law was developed to specify the supervision requirements stipulated in the law and establish a complete supervision structure covering industry establishment, operations, finance, internal control and industrial self-discipline.
Among them, the minimum paid-in capital is set according to the type of business, with a maximum of 200 million yuan; operators are also required to deposit a business deposit, with a maximum of 50 million yuan, to strengthen the financial soundness of the operators and protect the rights and interests of traders.
In terms of "market access", the Securities and Futures Bureau pointed out that the minimum paid-in capital amount of various VASPs is determined based on different business risks and operational needs. Among them, exchangers, transferors and underwriters are 50 million yuan, trading platforms and custodians are 100 million yuan, and lenders are 200 million yuan. If two or more businesses are operated at the same time, the capital required for each type of business should be calculated together. Financial institutions concurrently operating and overseas VASPs setting up branches in Taiwan must also allocate special working funds in accordance with regulations.
As for "financial institutions' participation in the virtual asset business", the Financial Supervisory Commission adopts the principle of gradual opening up. In the early stage, banks that have actually undertaken the virtual asset custody business will be the main ones. Depending on the development of the industry, other financial institutions will gradually be opened to participate. The initially open business scope includes four categories: exchangers, transferrs, custodians and underwriters, among which the exchange and transfer business is limited to corporate customers.
Taking into account the continued development of the virtual asset industry and the possible diversified application scenarios of the Taiwan dollar stablecoin in the future, the draft also retains the flexibility of the Financial Supervisory Commission to allow financial institutions to concurrently operate other virtual asset businesses in the future.
In terms of "financial soundness and protection of customer rights and interests", the Financial Supervisory Authority will require VASPs to deposit operating margins based on the degree of business risk. Exchangers, transfer providers and underwriters are required to deposit 10 million yuan, trading platform providers and custodians are required to deposit 30 million yuan, and lenders are required to deposit 50 million yuan. Those operating two or more businesses should be calculated on a consolidated basis, and the Financial Supervisory Commission may increase the amount of margin based on the operator's capital, business scale and risk level.
In addition, in order to "strengthen the security of customers' virtual asset custody", custodians should deposit an additional 2.5% as an operating margin at the end of June and December each year based on the balance of virtual asset custody, after deducting the amount entrusted to financial institutions for custody or other items approved by the Financial Supervisory Commission.
Huang Zhonghao pointed out that since lenders have the obligation to return virtual assets of the same or higher quantity and value to customers after borrowing them from customers, and face higher liquidity risks, the Financial Supervisory Commission has set stricter business qualifications, including having to have one year of experience in operating a trading platform business, or two years of experience in operating both exchange and custody businesses, and has set restrictions on the use, quantity and subject matter of borrowed virtual assets.
In terms of personnel management, VASP business personnel must complete more than 24 hours of professional courses and pass an exam to obtain a completion certificate. They must also participate in pre-employment training within six months after joining the job, and then participate in on-the-job training every two years to ensure they have professional knowledge related to the virtual asset business and market.
In terms of internal control, VASP must consider the overall operating activities of itself and its subsidiaries, establish and implement an internal control system, covering self-assessment, legal compliance, risk management, information security management and internal audit mechanisms to form a complete internal control structure.
In terms of financial information disclosure, VASP must prepare financial reports in accordance with relevant laws and International Financial Reporting Standards (IFRS), and announce and declare the semi-annual financial report reviewed by accountants within 2 months after the end of each half-year; the annual financial report must publish the annual financial report reviewed by accountants within 3 months after the end of the accounting year.
In addition, in order to strengthen industry self-discipline, the VASP industry association must formulate self-regulatory regulations for member businesses, and establish relevant management measures for matters such as publicity and advertising, inspection of member financial business, and dispute mediation.
