The Financial Supervisory Commission (FSC) yesterday said that it would clearly define so-called “securities tokens” and draft regulations for security token offerings by June 2019 to protect investors.
The FSC, which said at the Legislative Yuan’s Finance Committee in October last year that it would draft national standards for initial coin offerings, would not regulate digital tokens that are not securities tokens, FSC Chairman Wellington Koo told at a news conference.
Wellington Koo, FSC Chairman
“It is not easy to draw up the rules, as there is little to draw upon from other countries, but we will try to complete the work by June.”
Although the US Securities and Exchange Commission has proposed a definition for securities tokens, it seems to be too loose to be applied in Taiwan, Koo said.
There are many types of digital coins, but only those that have securities-like attributes — such as those with the potential to make capital gains through trading, or which serve as units of ownership interests in a corporation or asset — can be defined as securities tokens, Koo said.
As these tokens function similarly to a security, the commission would not draft another set of rules on token trades, but their trade would be regulated under the Securities Exchange Act, Koo said.
The commission would continue to communicate with the exchanges and firms that sell or issue the coins, Koo said.
The commission has no intention of stifling the potential innovations and productivity gains associated with cryptocurrencies if they are not used as securities, the chairman said.
Coins that are not defined as securities tokes and their initial coin offerings would not be regulated, he said.