The Financial Supervisory Commission (FSC) is considering relaxing regulations on securities investment consulting services with robo-advisors, the commission said on Tuesday.
Given that investors are embracing automated investing, the move would help companies provide innovative service, it added.
Relaxing regulations would help companies that have developed algorithms to execute rebalancing operations provide retail investors with better management service, the commission said.
Rebalancing operations are re-adjustments of asset allocations in a recommended investment portfolio to meet customers’ level of risk tolerance, the commission said.
For example, an investor might allocate 60 percent of their assets to stocks and 40 percent to bonds, it said.
However, the asset allocation might change to 70 percent and 30 percent respectively, if stocks are rising, the commission said.
Under the commission’s current regulations, robo-advisors must automatically dispose of some investment targets to restore the risk exposure that investors want, it said.
However, some securities and investing companies hope that the regulations can be relaxed so that robe-advisors could decide the ideal allocation for the investors, a strategy expected to generate a higher return as robo-advisors can utilize big data analysis and are not driven by emotions, the commission said.
As of the end of last month, robo-advisors this year managed funds totaling NT$2.29 billion (US$80.32 million), up 123 percent from NT$1.03 billion at the end of last year, with 81,512 investors using the service, up 2.5 times from the end of last year, it said.
Thirteen financial firms as of last month offered automated portfolio advisory, up from nine at the end of last year and six at the end of 2018, the commission said.
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