The Financial Supervisory Commission's three major new financial regulations will take effect in July, with the TISA savings account making its debut.
As Taiwan enters a super-aged society, the Financial Supervisory Commission announced in July that three important new financial measures will be implemented.
According to a summary by (Commercial Times), July will see the official launch of the Personal Investment Savings Account (TISA) in Taiwan, the easing of conversion restrictions on corporate bonds and convertible bonds during shareholder meetings, and the expansion of temporary accommodation subsidies for 'red list houses' in earthquake insurance.
Among the most watched is the TISA system, which will be implemented in phases. According to (Central News Agency) reports, the custodial settlement organization released a list of cooperating institutions and funds at the end of June, with more than ten funds available for selection initially, provided by 11 sales channels offering related services.
Huang Houming, Deputy Director of the Securities and Futures Bureau of the Financial Supervisory Commission, pointed out that the primary goal of the first phase of the TISA account is to assist the public in setting up dedicated accounts, promote financial management concepts, and integrate existing dividend tax benefits.
What is Taiwan's Personal Investment Savings Account (TISA)? Why are public reactions polarized?
What is Taiwan's Personal Investment Savings Account (TISA)? In simple terms, it is an investment plan that provides the public with long-term investment options, using a regular investment model.
The Financial Supervisory Commission previously stated that the TISA account is specifically targeted at young and middle-aged individuals, providing feasible and incentive-based retirement preparation options. By guiding the public to engage in disciplined self-investing over the medium to long term, it assists individuals in accumulating retirement capital and enhancing asset management capabilities and financial resilience.
TISA provides two main fee reductions: zero handling fees for continuous contributions for two years, and fund management fees must be lowered to below 1%, significantly lower than the general market level of 1.8%.
However, investors need to be aware that if they stop contributions or redeem early, they will lose their preferential eligibility and must wait six months before they can repurchase the same fund.
In a market filled with a variety of investment tools, public opinions on the TISA account are polarized. According to street interviews by (Public Television News), some people believe the policy has good intentions, but the key is how well it is executed; there are also investors who question whether self-managing stocks or ETFs might yield better returns.
Professor Tsai Ming-fang from Tamkang University reminds that any investment carries risks; opening a TISA account does not guarantee profits and may instead result in losses, necessitating careful assessment of investment benefits.
The savings account systems of Taiwan and Japan are very different, with Taiwan's TISA emphasizing fee benefits.
In contrast to Japan's Personal Savings Account (NISA), Taiwan's TISA system presents different characteristics.
(Public Television News) analysis points out that Taiwan combines its existing tax exemption framework, while Japan offers tax-free investment profits. Taiwan focuses on specific fund products, while Japan covers a diverse array of targets including stocks and ETFs, but Taiwan offers greater incentives in terms of management fee reductions.
Looking at the development history of Japan's NISA, the system has continuously evolved since its launch in 2014, with significant reforms completed in early 2024, integrating different account types and removing tax preferential time limits, with a lifetime investment limit set at 18 million yen.
In comparison, Taiwan's TISA is still in its infancy. Huang Houming stated that the Financial Supervisory Commission will continue to negotiate with the Ministry of Finance, hoping to secure more policy support.
By 2025, the proportion of elderly people in Taiwan will exceed 20%, making it an urgent issue for the government to ensure that citizens can maintain stable financial conditions in old age.
Minister Liu Jingqing of the National Development Council also pointed out that the promotion of TISA will change the current situation where personal investments are limited to savings or short-term asset allocation, guiding the public to start disciplined medium- to long-term investments earlier, preparing for retirement while reducing reliance on government retirement systems, and strengthening the overall social safety net.
This article titled 'New Financial Regulations from the Financial Supervisory Commission in July: How Personal Investment Savings Accounts (TISA) Can Help You Plan for Retirement?' was first published on 'Crypto City'.