FSC mulls rules concerning multitasking financial chiefs

The China Post news staff

TAIPEI, Taiwan — The Financial Supervisory Commission (FSC) may impose a ban to prevent chairmen of domestic trust and investment businesses from assuming other duties, said Huang Tien-mu, head of the commission’s Securities and Futures Bureau, yesterday.

Kuomintang Legislator Alex Tsai said heads of some investment trusts are designated by their parent companies and have assumed other jobs. They have neither strong commitment nor sufficient expertise to deliver professional performance, which is partially the reason behind recent trading irregularities, according to Tsai.

In response to Tsai’s comments, Huang said the FSC would explore the possibility of preventing investment trust heads from assuming other responsibilities by reviewing relevant regulatory requirements for financial institution leaders. The decision regarding this potential rule will be released within 30 days, said Huang at the Legislative Yuan yesterday. Currently, the full-time requirement is applied to investment trust presidents only. Recently trading scandals, however, have caused the public to call for tightened scrutiny of the investment trust industry.

ING SITC, which handled the investment activities for government-owned funds, incurred more than NT$130 million in losses last year after the IPO shares of a local company they purchased at an artificially inflated price saw a steep decline. On March 5, the state-run First Securities Investment Trust Co. was banned from creating any new funds for losses related to stock manipulations by three former fund managers.