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.<\/p>\n
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.<\/p>\n
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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tDoes your jurisdiction have a concept of \u201csimple, transparent and comparable\u201d securitisations?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tNo, there is no such concept under Taiwan securitisation legal framework.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tDoes your jurisdiction distinguish between private and public securitisations?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tYes, the beneficiary certificates\/securities under the FASA and RESA are allowed to be issued through public offering or private placement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tAre there registration, authorisation or other filing requirements in relation to securitisations in your jurisdiction (either in relation to participants or transactions themselves)?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tAccording 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.<\/p>\n
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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tWhat are the disclosure requirements for public securitisations? How do these compare to the disclosure requirements to private securitisations? Are there reporting templates that are required to be used?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tIn 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.<\/p>\n
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).<\/p>\n
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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tDoes your jurisdiction require securitising entities to retain risk? How is this done?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tIn 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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tDo investors have regulatory obligations to conduct due diligence before investing?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tNo, there is no such requirement for the investors of the securitisation products.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tWhat penalties are securitisation participants subject to for breaching regulatory obligations?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tUnder 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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tAre there regulatory or practical restrictions on the nature of securitisation SPVs? Are SPVs within the scope of regulatory requirements of securitisation in your jurisdiction? And if so, which requirements?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tAs 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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tHow are securitisation SPVs made bankruptcy remote?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tPursuant 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.<\/p>\n
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.<\/p>\n
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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tWhat are the key forms of credit support in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tPursuant 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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tHow may the transfer of assets be effected, in particular to achieve a \u2018true sale\u2019? Must the obligors be notified?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tThere 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.<\/p>\n
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:<\/p>\n
\nthe 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<\/li>\n 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.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t \r\n\t\t\t\t\t\tIn what circumstances might the transfer of assets be challenged by a court in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tIn 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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tAre there data protection or confidentiality measures protecting obligors in a securitisation?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tThere 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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tIs the conduct of credit rating agencies regulated?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tThere 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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tAre there taxation considerations in your jurisdiction for originators, securitisation SPVs and investors?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tSince 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.<\/p>\n
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.<\/p>\n
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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tTo what extent does the legal and regulatory framework for securitisations in your jurisdiction allow for global or cross-border transactions?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tThere 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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tHow is the legal and regulatory framework for securitisations changing in your jurisdiction? How could it be improved?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tThe 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.<\/p>\n
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.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t
\r\n\t\t\t\t\t\tAre there any filings or formalities to be satisfied in your jurisdiction in order to constitute a true sale of receivables?<\/h3>\r\n\t\t\t\t\t\t+<\/button>\r\n\t\t\t\t\t\tNo, there is no such requirement in Taiwan.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n
Estimated word count: 3124<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n
![](\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/03\/Firm-Logo_Lee-and-Li.jpg\"\/){kind=logo}
<\/span><\/div>"},"post_detail":{"above_title":"