Before 2008, Taiwan’s securitisation market was very vibrant. However, after the 2008 financial crisis, due to investor concerns about such products and regulatory authorities worrying that the issuance of securitised products would affect the prices of the real state (mainly because residential mortgage-backed security would help banks take real mortgage loans off balance sheets, allowing banks to provide more funds for real estate transactions), Taiwan’s securitisation market came to a standstill. The number of cases each year has been limited to one or two at most since 2008.

Pursuant to the Financial Assets Securitisation Act (the “FASA”) (as amended on June 4, 2014), the “financial assets” under the FASA include:

• rights under automobile loans or other loans secured by movable properties, together with their respective security interests
• rights under residential loans or other loans secured by real properties, together with their respective security interests;
• rights under leases, credit cards, accounts receivable, or other monetary rights;
• beneficial rights arising from a trust agreement entered into by and between an originator and a trust enterprise with regard to the assets as referred to above; or
• any other rights or claims as approved by the FSC.

Pursuant to the Real Estate Securitisation Act (the “RESA”) (as amended on December 6, 2017), the assets that are qualified to be securitised include: (1) real estate (including land, buildings, roads, bridges, tunnels, rails, wharfs, parking lots, as well as other structures of economic value affixed to land and appended facilities thereto); (2) related rights of real estate (including superficies and other rights approved by the relevant competent authority); and (3) real estate related securities (beneficiary securities or asset-backed securities issued or delivered by a trustee or a special purpose company (the “SPC”) in accordance with the RESA or the FASA, where the asset pool contains real estate, related rights of real estate or mortgage secured by real estate).

Please refer to our reply above. The FASA, the RESA, and related regulations do not explicitly state which assets cannot be used as underlying assets for securitisation. However, since the FASA and the RESA specify the types of assets that can be used for securitisation, it could be interpreted that any assets not explicitly mentioned in the FASA and the RESA are not allowed to be used as underlying assets for securitisation.

Securitisation in Taiwan, depending on the nature of the underlying assets, is mainly governed by the FASA, the RESA and certain relevant regulations promulgated pursuant to the authorisations in the FASA and RESA. As indicated by the names of the Acts, the FASA provides for the securitisation of financial assets, mainly the assets arising from banking operations, such as residential loans, car loans, etc.; on the other hand, the RESA provides for the securitisation of real properties or rights arising from real properties. The competent authority of both the FASA and the RESA is the Financial Supervisory Commission ROC (Taiwan) (the “FSC”).

The definition of “securitisation” under the FASA refers to the act that the originator entrusts the assets to a trustee or transfers the assets to a special purpose company (the “SPC”) pursuant to the FASA, whereby the trustee or the SPC issues beneficiary certificates or asset-backed securities on the basis of such assets to raise funds.

The definition of “securitisation” under the RESA refers to the act by which a trustee establishes a real estate investment trust (the “REIT”) or real estate asset trust (the “REAT”) pursuant to the provisions of the RESA, and acquires funds from issuing beneficiary securities to non-specific persons through public offering or delivering beneficiary securities to specific persons through private placement.

Under the RASA, securitisation can only be done through a trust. In contrast, while the FASA provides two frameworks, trust and SPC, all cases have used the trust framework. To date, there have been no securitisation transactions under the FASA that have been carried out using the SPC framework.
In the FASA securitisation transactions, the key parties involved include the originator, the trustee, the service agent, the trust supervisor and the investor.

In the RASA securitisation transactions, the key parties involved include the originator, the trustee, the arranger, the real estate management agent, the trust supervisor and the investor.

The competent authority of both the FASA and the RESA is the FSC, which is the primary regulatory body for financial institutions in Taiwan, including banks, financial holding companies, insurance companies and securities firms.

With respect to the originator under the FASA, in principle, the originator must be a financial institution, but if approved by the FSC, it can also be a non-financial institution. In practice, there are manufacturing companies acting as the originator using their accounts receivable as underlying assets for securitisation.

With respect to the trustee (as the issuer of the relevant beneficiary certificates), pursuant to the FASA, the trustee for a FASA securitisation transaction shall be a trust enterprise (in practice, usually the banks). Although the RESA, unlike the FASA, does not expressly provide that the trustee (as the issuer of the relevant beneficiary certificates) shall be a trust enterprise, in practice the trustee of a REIT or REAT securitisation is always a bank.

There is no limitation on the investors in the public offering securitisation transactions but the investors in a private placement securitisation transaction are limited to the qualified investors, including: (1) banks, bills finance enterprises, trust enterprises, insurance enterprises, securities enterprises or other juristic persons or institutions approved by the competent authority; and (2) natural persons, juristic persons or funds meeting conditions set by the competent authority.

No, there is no such concept under Taiwan securitisation legal framework.

Yes, the beneficiary certificates/securities under the FASA and RESA are allowed to be issued through public offering or private placement.

According to the FASA and the RASA, if the trustee or the SPC intends to issue beneficiary certificates/securities or asset-backed securities, the trustee/the SPC shall file an application or make a registration with the FSC for the approval or effective registration.

For review of the securitisation applications, the FSC has promulgated two regulations (in relation to the FASA, the Regulations Governing the Issuance of Beneficiary Certificates by a Trustee and Asset-Backed Securities by Special Purpose Company (as amended on April 8, 2019); in relation to the RESA, the Regulations Governing the Public Offering or Private Placement of REIT and REAT Beneficiary Securities by a Trustee (as amended on April 8, 2019) to govern the required documents and procedures for the FSC to review and approve the applications.

In relate to the FASA securitisation, after the obtaining of the approval and prior to the entrustment or the transfer of the assets, the originator shall make announcements of the variety, quantity and content of the major assets entrusted to the trustee or transferred to the SPC in accordance with the provisions of the FASA for three (3) consecutive days in the daily local newspapers circulated at the place of its principal office or in other ways prescribed by the competent authority. The originator, which fails to make the announcement as described above, or has made announcements not in compliance with the requirement prescribed by the competent authority, shall not hold the trust or transfer against a third party. The above-mentioned public announcement requirement applies to both the public securitisation transactions and the private placement securitisation transactions.

Furthermore, the major ongoing public disclosure requirements will be the disclosure of the financial information of the trust (such as the balance sheet, income statements and the report on the management and utilisation of the entrusted assets).

For the public announcement purposes, the FSC has issued a ruling governing the format for the financial asset entrustment and transfer. The ruling specifies the format of the announcement and the matters and information that should be disclosed.

In the FASA and the RASA, there is no explicit requirement in this regard. However, in the arrangement of the transaction structure, for credit enhancement purposes, subordinate beneficiary certificates/securities may be issued and held by the originator.

No, there is no such requirement for the investors of the securitisation products.

Under the FASA and the RASA, individuals who violate the mandatory provisions set forth by the FASA and the RASA may face varying degrees of administrative penalties or criminal liability. For example, issuing beneficiary certificates/securities without approval will be subject to certain criminal liability. At the entity level, the primary subjects that may be penalised are the originator and the trustee.

As mentioned above, the FASA securitisation cases can be conducted through trusts and SPCs, while the RASA securitisation cases can only be conducted through trusts. When adopting a trust structure, the trustee must be a trust enterprise as defined by the Taiwan Trust Business Act and must be rated above a certain level by a credit rating agency recognized by the competent authority (in practice, this is usually a bank). As for SPCs, according to the FASA, they shall be a company limited by shares and established with the approval of the competent authority for the purpose of conducting asset securitisation business.

Pursuant to the FASA, a SPC should be established by a financial institution other than the originator, and the shareholders are limited to one person. The originator transfers financial assets to the SPC, which issues asset-backed securities based on the acquired assets to raise funds from investors. In terms of the management and disposal of the acquired assets, the SPC is generally prohibited from pledging, transferring, providing guarantees, or making other disposals of the acquired assets, and is required to appoint or trust a service institution to manage and dispose of the acquired assets.

Since the SPC is specifically established for the purpose of operating asset securitisation business, to avoid the occurrence of debt defaults due to engaging in other businesses that may lead creditors to seize or attach the acquired financial assets, the scope of business for the SPC is significantly restricted. It is not allowed to provide guarantees or endorsements for others, nor can it engage in other businesses. Through the above arrangements, it is ensured that the assets of SPC will not be used for other purposes.

Furthermore, as mentioned above, all securitisation cases in Taiwan are conducted through trusts. According to the provisions of the Taiwan Trust Act, trust assets have been separated from the principal (e.g., originator) and are not considered the property of the trustee, achieving the effect of bankruptcy remote.

Pursuant to the FASA, the credit enhancement can be provided by way of provision of collaterals, credit insurance, excess assets, replacement of part of Assets or other methods. In practice, the most commonly seen credit enhancement is the issuance of multiple classes of the beneficiary certificates/securities, which refers to the classification of the order in which investors receive repayment of principal or returns, distinguishing between different classes of ranks such as senior and subordinated, in order to enhance the credit rating of senior securities or asset-backed securities.

There is no concept of “true sale” under Taiwan law. However, it is generally understood that the entrustment of assets for securitisation purpose is a “true sale” when there is no risk of cancellation (or claw-back) of such entrustment.

Under Taiwan law, without notification to the obligor of a claim (such as the loans or accounts receivables), the assignment or transfer of such claim cannot be against the relevant obligor. However, since it might not be practicable for the trustee or originator to notify all obligors of the assignment or transfer of the relevant rights, the FASA permits that when the originator entrusts the assets to the trustee or transfer the assets to the SPC in accordance with the FASA, the transfer of rights shall not be held valid against the obligor unless the obligor has been notified of such transfer or a certificate evidencing the announcement (meaning that the originator shall make announcements of the variety, quantity and content of the major assets entrusted to the trustee or transferred to the SPC in accordance with the FASA for three (3) consecutive days in the daily local newspapers circulated at the place of its principal office or in other ways prescribed by the competent authority) has been mailed to the obligor, except for the following circumstances:

• the originator is appointed or entrusted by the trustee or the SPC as the servicer to collect the rights from the obligor and such appointment or entrustment has been announced pursuant to the FASA; or
• the originator and the obligor have entered into a contract under which it can use other means to replace the notification or mailing of the certificate of announcement as required under the FASA.

In principle, if the relevant trusts and transfers comply with the requirements of Taiwan law (for example, the need to make the trust registration and notify the debtor of the transfer), their validity should not be challenged. However, the concepts of fraudulent transfer and hardening period under the Taiwan Civil Code and Bankruptcy Act are still applicable. That is, if such situations occur, the relevant trust and transfer actions may be invalid or revoked.

There is no specific provisions under the FASA and the RESA regarding the data protection or confidentiality. However, since the trustees are the banks, they will subject to the confidentiality obligations under the Banking Act (as amended on June 28, 2023) and the requirements under the Personal Data Projection Act (as amended on November 11, 2025). In local banking practice, it is common that the relevant financing documents entered into by an originator with its customers would include a clause providing express consent for disclosure and use of the relevant information for the purpose of securitisation transactions.

There is no such provision under the FASA and the RESA. Under the current legal framework, although there are rating requirements for publicly issued beneficiary certificates/securities, there are no specific requirements for the conduct of rating agencies under the FASA, the RESA and related regulations.

Since the entrustment of the assets to the trustee will be deemed as the disposal of such assets, the originator might be subject to the income tax for the gain from such disposal.

For acting the trustee in a securitisation, a trustee will charge service fees for such services and therefore, it shall pay income tax for such service fees.

The investors need to pay the security transaction tax for their sale of the beneficiary certificates. In addition, the investors have to pay income tax for the dividends from their own beneficiary certificates/securities.

There is no specific provision governing this matter under the FASA and the RESA. However, based on our past experience, there have been no direct instances of Taiwanese assets being used as underlying assets for global or cross-border securitisation transactions. There have been cases where Taiwan assets were used as underlying assets, first issuing securitisation certificates through private placement in Taiwan, and then using those securitisation certificates as underlying assets for global or cross-border securitization transactions.

The main laws governing securitisation in Taiwan are the FASA and the RASA, which were enacted in 2002 and 2003, respectively. Since their enactment, the FASA has only undergone a minor amendment once, while the RASA has experienced one major amendment and two minor amendments. However, as mentioned above, after 2008, due to the lack of a thriving securitisation market in Taiwan, there have been no significant changes in the relevant legal and regulatory environment.

Nevertheless, in order to invigorate REITs (in recent years, several REITs issued under the RASA have faced liquidity issues, with their net asset value per unit exceeding the prices of beneficiary certificates/securities, leading to liquidation after investor resolutions), the Taiwan government is currently planning to amend the Securities Investment Trust and Consulting Act to allow REITs to raise funds in a manner similar to securities investment trust funds in the future.

No, there is no such requirement in Taiwan.