The Financial Supervisory Commission (FSC) would inspect 25 companies to see if they have contravened regulations while selling products to senior citizens, commission Chairman Thomas Huang (黃天牧) said yesterday.
The commission selected 10 banks, six credit unions, six insurance companies and three securities companies for examination following a preliminary assessment, Huang told a meeting of the legislature’s Finance Committee in Taipei.
The commission would look into whether the companies have sold large amounts of high-risk financial products, such as high-yield bonds with low ratings or stocks-linked funds, to people over 65, Financial Examination Bureau Deputy Director-General Chang Tzy-hao (張子浩) said.
Photo: CNA
It would inspect whether the firms have promoted their products inappropriately, such as by encouraging clients to cancel fixed deposits in advance or to borrow money to buy the financial products, Chang said.
The commission would examine whether the companies have provided comprehensive information to clients about investment risks and the products’ content, he said.
The regulator would also check whether the firms have set anti-fraud mechanisms to confirm that their staff perform well and their clients are fully aware of investment risks, Chang said.
As senior citizens generally do not have a high risk appetite, companies should be more careful when selling risky products to them, he said.
“We are not saying that seniors must not buy risky products, but we want to ensure that financial companies understand their clients’ risk appetite and financial strength before selling products,” Huang said.
The fines for inappropriately selling financial products to senior citizens would be heavier than those imposed for selling such products to regular clients, he said.
Banks could be fined up to NT$50 million (US$1.8 million) if found to have contravened the regulations, while insurers could be fined NT$12 million, securities companies NT$4.8 million and credit unions could be fined NT$600,000, the commission said.
It has demanded that insurers record their marketing activities from beginning to end when selling investment-linked products to senior citizens.
The inspections are to begin later this month and end at the end of July, Chang said.
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