On Dec. 29, TAI FSC issued order re private equity investment funds.
TAI FSC issued order for stipulation of relevant rules regarding Securities investment trust and consulting act, and Regulations governing securities investment trust funds.
Overview of Order
Private equity investment funds (private funds) in Taiwan can invest in private equity funds and overseas funds without local approval, subject to certain conditions.
Conditions for investments include limits on Mainland China securities, a one-year establishment requirement for fund management institutions, and regular valuation.
When investing in private funds, trust contracts, prospectuses must specify scope, details of investment, including selection criteria, risk factors, past performance.
Investors should be made aware of unique risks associated with private equity funds.
Securities investment trust companies using private funds must adhere to specified investment ratios, not exceed certain percentage of NAV when investing in PE funds.
Investment ratio shall comply with FSC's order No. 1030021505 dated Jul.14, 2014.
Internal control measures and risk management procedures should be established.
TAI SITCA
TAI SITCA issued letter to members requesting compliance with instruction from FSC.
Investment trust enterprises are required to specify the fund's custodian institution as a limited partner when investing in limited partnerships that are private equity funds.
They must follow registration process for limited partnerships as outlined by MOEA.
TAI SITCA also provided a comparison table for the issued order, amendments to related Q&A and amended comparison tables on the regulatory authority's website.
Effectiveness
The order shall be effective Dec. 24, 2023.
Jan. 2024 TAI SITCA Investment Ratio
On Jan. 3, 2024, TAI SITCA informed of FSC's abolition of letter dated Jul. 14, 2014.
Letter specified the investment ratio of private funds in commodities such as gold.
Jan. 10, 2024 TAI Trust
On Jan. 10, 2024, TAI Trust published letter from TAI FSC dated Dec. 29, 2023, to members re order from TAI FSC, and abolition of TAI FSC order dated Jul. 14, 2014.
Mar. 2024 TAI SITCA Fund of Funds Files
On Mar. 29, 2024, TAI SITCA revisedMonthly reporting file for fund of funds (FOF) and Daily reporting file for fund of fund to align re the opening of private equity (PE) funds.
Added (PE) fund established domestically, PE fund established overseas to the files.
In addition, specified the reporting requirements of FOF for PE fund investment.
Nov. 2024 Monthly Report Checklist
On Nov. 20, 2024, TAI SITCA amended securities investment trust fund monthly report checklist according the to TAI FSC orders dated Dec. 29, 2023 and Jan. 2, 2024 above.
The revised checklist shall be applicable from filing monthly report in Jan. 2025.
