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TDCC’s Three Big Moves in the Year of the Ox: eSMART for Book-entry Transfer, Onshore Fund Settlement Hub, and Autonomous Retirement Planning

2021/02/23

Last year, the Taiwan Depository & Clearing Corporation (TDCC) weathered the pandemic storm and kept developing back-office digitalization. In the spirit of financial inclusion, the ReLife Project, a Retirement Investment Plan for All, promoted by TDCC has successfully raised public awareness of financial planning for retirement. As the Year of the Ox dawns, Sherman Lin, TDCC’s Chairman & CEO, announced the company’s three major shifts. The company will be building the eSMART Workstation System and planning for relevant investor services, establishing a universal onshore fund settlement system, as well as setting up a retirement preparation platform with investment trusts and insurance companies.

The existing SMART System plays an important role in data transmission and information search when securities dealers are processing investors’ applications for book-entry transfer. Gradually, the current system will be upgraded to a digital book-entry transfer platform, the eSMART System. Securities dealers will be able to boost efficiency by digitally handling, transferring, and maintaining various book-entry transfer documents via the new platform. The upgraded platform is going to connect with the ePASSBOOK, an app with a 1.9 million user base. Investors will be able to apply for book-entry transfer through the app or the webpage in desktop mode. The eSMART digital version will need approximately two to three years before its official launch. This year marks the commencement of the first stage of the plan.

The onshore fund settlement hub is the second essential project for TDCC this year. Funds have become an important part of asset allocation, but the daily receipt and payment business is quite complex between multiple fund sellers and multiple accounts in fund custodian’s platform. This many-to-many receipt and payment rule also leads to higher costs. To solve the problem and cope with relevant procedures, TDCC has invested resources to develop a fund settlement hub. The idea is to help fund institutions reduce operation costs of fund receipt and payment, and subsequently help investors reduce transaction costs. In the grand scheme of things, the new hub will also enhance the operational efficiency of the fund market.

Among the financial inclusion projects, the most widely discussed and welcomed must be the ReLife Project, an experimental approach that all nationals can autonomously conduct investment planning to prepare for their retirement. The campaign has successfully started a trend to financially plan ahead for people’s post-retirement life. Considering that Taiwan has entered an aged society with low fertility rates and that people’s demand for long-term retirement investment is increasing, the third pillar of this year’s scheme is the Retirement Planning Platform. Led by the FundRich Securities, the platform consists of retirement financial planning and public well-being. People can find long-term investment products that will be a good fit for pension savings. The offerings are expected to include four packages: education, investment, insurance, and public well-being. Apart from providing systematic investment plans (SIP) for funds, the platform will partner with life insurance companies to promote suitable life insurance options for users. The project utilizes the power of education and public well-being to gain exposure so that the younger generation will learn more about the aging society and retirement planning, and hopefully, they will be more engaged in starting retirement planning early.

Chairman & CEO Lin pointed out that a small change in the back office of the financial sector will impact the whole industry. As the system development is trying hard to catch up with the digital finance technology, TDCC should adopt a long-term perspective and be meticulous when making every move. As a result, the core business and financial inclusion concepts of TDCC’s three moves for the Year of the Ox all stem from the very cautiously laid foundation with fine details of the financial market. The company hopes to provide inexhaustible energy and unflagging support that will help the front offices’ financial services business thrive.

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