With the establishment of the first securities investment trust enterprise (“SITE”) in 1983, the number of SITE has now increased to 39; as of end of 2010, the amount of mutual fund issued has exceeded NTD1.8 trillion. The capital that the industry brought in has enabled its importance in Taiwan securities and bonds industry while it is also one of the major investment channels in Taiwan.
With the fast increasing of asset under management and overall industry size, the Taiwan SITE has been through its glorious days in the past few years. However, as any financial curve, a climbing curve will eventually reverse its direction, after its good days, the Taiwan SITE industry is currently confronted by the challenge of professional shortage, capital competition and industry transition. The difficulty that the industry faced is perfect competition in the small domestic market, thus, it is important that the industry utilize niche market and internationalization strategy. Since China is recognized as the fastest growing market in many perspectives, Taiwan SITE increase its reach in China market would be its first step to head toward internationalization.
Various studies indicated that compare to financial market in China, there are more competitive advantages in the current regulations, policies, professional development and available resources in Taiwan financial market. As such, Taiwan SITE should accelerate its pace of adjustment and policy opening to prevent from blundering away timing and opportunity of development in China market.
The objective of this paper is to discuss the challenge of current and future development of Taiwan SITE industry and the possible legal risks and responsibilities faced when increasing reach in China from the perspective of Taiwan SITE industry and under current Taiwan and China regulations, in addition, personal suggestions are included in this report for the reference of SITE industry and competitive authority.