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Interpretative Letter Issued for Articles 2 and 7 of the Regulations Governing Use of Insurance Enterprise’s Funds in Special Projects, Public Utilities and Social Welfare Enterprises
The Financial Supervisory Commission of Taiwan (the "FSC") issued an Interpretative Letter for Articles 2 and 7 of the Regulations Governing Use of Insurance Enterprise's Funds in Special Projects, Public Utilities and Social Welfare Enterprises, per the letter Ref. No. Jin-Guan-Bao-Cai-Zi No. 11004345882 dated December 24, 2021 (the "Letter"). The main stipulations are as follows:
1. The Letter is issued in accordance with Subparagraph 2 of Article 2 and Subparagraph 3 of Paragraph 1 of Article 7 of the Regulations Governing Use of Insurance Enterprise's Funds in Special Projects, Public Utilities and Social Welfare Enterprises (the "Regulations").
2. The "private equity fund that meets the conditions set by the competent authority and whose investment scope is in line with government policy" stated in Subparagraph 2 of Article 2 of the Regulations shall be restricted to the following items:
(1) The domestic private equity fund established by a subsidiary invested by a securities investment trust enterprise using its own funds acting as a general partner, as provided under the Letter (Ref. No. Jin-Guan-Zheng-Tou-Zi No. 11003628781 dated November 2, 2021) issued by the FSC,.
(2) The domestic private fund, established by a subsidiary invested by a securities firm acting as the general partner, as provided under the Letter (Ref. No. Jin-Guan-Zheng-Quan-Zi No. 1070320901 dated June 1, 2018) issued by the FSC.
(3) The domestic private equity fund which has obtained the qualification letter according to the Guidelines for Promotion of Private Equity Fund Investing in Industries promulgated by the National Development Council.
3. The abovementioned investment scope of private equity funds in which an insurance enterprise may invest is limited to the following items:
(1) Public services and utilities listed in Article 3 of the Regulations.
(2) The government approved Five Plus Two Key Innovative Industries listed in the Letter (Ref. No. Jin-Guan-Bao-Cai-Zi No. 10610908021 dated March 21, 2017) issued by the FSC, including Green Energy Technology, Asia Silicon Valley, Biotechnology and Pharmaceuticals, National Defense Industry, Smart Machinery, New Agriculture and Circular Economy Industries.
4. When an insurance enterprise invests in the private equity fund provided in Point 2, its investment amount or capital contribution amount in the private equity fund may not exceed 25% of the paid-in capital or paid-in capital contribution of the investee, if one of the following conditions is met:
(1) The investment target is among items listed in Subparagraphs 1 and 2 of Point 2.
(2) The domestic private equity fund listed in Subparagraph 3 of Point 2, which has obtained the qualification letter according to the Guidelines for Promotion of Private Equity Fund Investing in Industries promulgated by the National Development Council and is invested by the National Development Fund of the Executive Yuan.
5. The Letter took effect on December 26, 2021; two letters, Ref. No. Jin-Guan-Bao-Cai-Zi No. 10602505942 dated January 2, 2018 and Ref. No. Jin-Guan-Bao-Cai-Zi No. 10701944711 dated September 3, 2018, issued by the FSC were repealed on the same day.