On 29 December 2017, the long discussed "Draft Bill of Financial Technology Innovation and Experiment Act" (commonly known as the Financial Regulatory Sandbox) obtained final approval on the third reading in the Legislative Yuan! Taiwan became the fifth country to implement financial experiment sandboxes after Britain, Singapore, Australia and Hong Kong. Moreover, the duration of each experiment can last up to three years. The date of entry into force will be set by the Executive Yuan; however start-up companies could start on preparing their applications now.
The purpose of regulatory sandboxes is to enable financial start-ups to carry out experiments in confined spaces while using technologies to develop innovative financial products or services, in order to avoid potential risks posed by Fintech or endangering the rights of consumers. During the period of experimentation, financial start-ups are entitled legal immunity.
According to the final decision made today on the financial regulatory sandbox, the competent authority is the Financial Supervisory Commission (FSC). After the financial start-ups submitting applications, the FSC will hold a review meeting to make the approval or rejection, and complete the review process within 60 days. The members of review meetings should include experts, academics and representatives of organizations in finance, technology and other relevant experiment fields. The amount of external reviewers shall not exceed 1/2 of the total number of the committee members, and not less than 1/3. The experimental period for first time applicants is limited to one year; however on the premise that the relevant laws and regulations are not yet completed, the experimental period can be prolonged up to 3 years. This also allows Taiwan to have far longer sandbox experimental period than other countries do. It aims to give sufficient space for development to the industry while offering more flexibility for the uncertainty of regulatory changes.