We published an earlier article regarding proposed regulations to be promulgated by the Taiwan Financial Supervisory Commission (the “FSC”) concerning security token offerings (“STO”).  At the end of June, the FSC released more information on what the final regulations may include.

The latest proposals do not vary significantly from the earlier proposed regulations except with respect to the two issues set out below:

1. Increase in individual investor limit.  The cap on the amount an individual professional investor can invest in a single STO was raised from NT$100,000 (approximately US$3,000) to NT$300,000 (approximately US$9,000).
2. Addition of limitations on STO platforms.  The more substantial change from the proposed regulations was the addition of limitations on the dollar amount and frequency of STOs allowed to be conducted on individual STO platforms.  The latest proposals provide that an individual platform may conduct STOs only up to an accumulated volume of NT$100 million (approximately US$3 million).  After a platform has conducted STOs aggregating NT$100 million, it may no longer conduct STOs.  Each STO platform must also wait at least one year between each STO conducted.  These two additional limitations will very likely dissuade most, if not all, potential STO platform providers from entering the market.

We will continue to watch this space in hopes that more business-friendly regulations will eventually materialize.

For more information, please contact Gregory Buxton at gbuxton@winklerpartners.com.