In the past, the Financial Supervisory Commission (FSC) differentiated business trial in the financial sector by categorizing them into banking, securities/futures, and insurance industries, each governed by distinct operational guidelines. To enhance competitiveness of businesses, protect the rights of financial consumers, and ensure consistency in regulatory standards, the FSC announced the "Operational Directions for Financial Institutions Applying for Business Trial" (hereinafter referred to as the Directions) on October 29, 2024.

I. Scope of Businesses Trial for Application

In the past, trial operations of banking and securities/futures industries were limited to expansion of already approved lines of business or other lines of business already approved by the competent authorities as stipulated in the laws and regulations. The Directions expand this scope to include "business item[s] not yet allowed under an administrative rule or interpretive rule of the FSC, a self-regulatory rule set out by a financial industry association or a rule of a self- regulatory organization." This encompasses innovative business models and expansions of existing business models, among others.

II. Eligible Applicants for Business Trial

The Directions specify the types of financial institutions eligible to apply for business trial, which include banking, securities/futures, and certain insurance industry entities. Among which, insurance agents and brokers must operate as corporate organizations or banks concurrently operating such services.

Furthermore, to encourage innovation, financial institutions may collaborate with non-financial entities, such as fintech companies or IT service providers, to apply for business trial jointly.

III. Required Documentation for Business Trial Application

The Directions outline specific documentation to be submitted with the business plan. In addition to the existing requirements such as basic information and relevant analyses, the new provisions also require the “description of information systems, security control operations, and risk response measures to be adopted for the business trial,” “criteria for evaluating the success or failure of the business trial,” “follow-up procedures in case of failure of business trial, or after trial period,” and “assessment of money laundering and terrorist financing risks and related risk control measures.”

Regarding declarations, in addition to statement of compliance that are already required, applicants shall also submit statement of risk management, statement on internal controls, and statements of relevant supervisors, such as statement of information security evaluation.

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