Taiwan FSC to Set Limit on Investment in a Financial Institution by a Non-financial Company

To further strengthen the policy of separating financial institutions and non-financial ones, the Financial Supervisory Commission (FSC) recently announced its intent to impose restrictions on non-financial companies to invest in financial institutions and the number of seats of the board of directors. Currently, a financial institution, including a financial holding company, is permitted to invest no more than 5% of the total issued and outstanding share capital of the target company. However, the current regulation does not set any restrictions on any investment by a non-financial institution in a financial institution.  Under Taiwan law, a financial holding company is permitted to invest in the aggregate not more than 15% of its net worth in non-financial companies and any such investment shall be no more than 5% of the total issued and outstanding share capital of the target company.