Taiwan’s financial regulator has launched a probe into 20 financial firms accused of pressuring employees to sell exchange-traded funds (ETFs). The investigation, sparked by over 100 employee complaints, highlights intense competition in one of Asia’s largest ETF markets.
Taiwan Cracks Down on Forced ETF Sale
The FSC’s investigation began after employees reported being forced to meet high ETF sales targets, with some facing penalties or reduced pay for failing to comply. Huang Hou-ming, deputy director-general of the FSC’s Securities and Futures Bureau, confirmed the probe, noting that the regulator is also examining whether staff compensation unfairly prioritizes sales over compliance with rules.
The surge in ETF competition stems from recent market swings, driven by U.S. tariff policies under President Donald Trump. Taiwanese stocks hit a bull market this month after a sharp sell-off in April, pushing firms to aggressively market ETFs, especially those tied to U.S. bonds, which saw heavy investment from Taiwanese buyers last year. The FSC aims to ensure fair treatment of employees and protect investors in this heated market.
History of Taiwan’s Regulatory Stance
While the ETF probe unfolds, Taiwan’s financial oversight extends beyond cryptocurrencies, where the FSC has taken a cautious but progressive stance. Since 2019, crypto exchanges must register with the FSC and comply with anti-money laundering laws. In 2024, the regulator reportedly introduced stricter rules, requiring platforms to separate customer funds and report suspicious transactions.
This followed a 2023 case in which a local crypto exchange was fined for unregistered operations, highlighting the country’s focus on investor protection. In 2022, the FSC investigated two banks for mis-selling structured products, a scandal similar to the current ETF probe, revealing a pattern of aggressive sales tactics.
With ETFs gaining popularity, regulatory watchers have been making headlines lately, with SECs around the world trying to figure out how they can be traded under strict regulatory observance. Recently, the U.S. SEC showed a delay in its ruling on Grayscale’s proposal to add staking to its Ethereum ETF.
On the other hand, Hong Kong’s Securities and Futures Commission (SFC) has granted HashKey Exchange approval to offer Ethereum (ETH) staking services. This shows a varying regulatory approach by nations to secure ETF trading.
As Taiwan studies its thriving ETF and crypto sectors, the FSC will likely make plans to tighten regulations, with potential new guidelines for crypto ETF approvals by late 2025.
