Taiwan Depository & Clearing Corporation

In alignment with the Financial Supervisory Commission's (FSC) policy, which allows fund holdings purchased by clients through securities firms on the Fund Transaction Platform operated by TDCC, to be used as collateral for Securities Finance Company (SFC) lending operations, TDCC has successfully implemented the necessary system enhancements. This new initiative enables investors to quickly access short-term capital by using their onshore fund holdings as collateral, significantly improving the capital utilization efficiency of their fund assets. It also broadens the application scope of fund products and offers investors greater financial flexibility.

Historically, funds have been viewed primarily as long-term investment tools. When investors needed immediate liquidity, their only option was often to redeem their holdings, which disrupted their investment strategies and reduced their portfolios. With the launch of this innovative service, however, investors can now use funds—purchased and registered under the name of the selling agent (the securities firm)—as collateral for loans from the SFC. This allows them to secure timely funding without having to liquidate their investments, ensuring that funds continue to serve the dual purpose of "long-term investment" and "flexible capital deployment."

Mr. Bing-Huei Lin, Chairman of TDCC, commented, "Funds play a vital role in building long-term wealth. The introduction of fund financing and collateralization will empower investors to address unexpected liquidity needs with greater flexibility, all while preserving their existing investment positions. This initiative further strengthens the role of funds as a robust asset management tool."

Chairman Lin further emphasized that the new service is expected to help reduce turnover rates and enhance the stability of the fund market. It will also provide investors with more diverse and flexible options for retirement wealth planning. This strategy not only benefits investors but also creates a multi-party win-win scenario across the market: •securities investment trust enterprise can maintain stable fund sizes. •Fund Distributors (securities firms such as FundRich) can enhance the value of customer service. •Investors can simultaneously achieve long-term investment goals and address short-term cash needs. •The SFC can expand its lending operations, secured by marketable securities.

This collaborative effort perfectly aligns with broader financial policy goals and market innovation, driving both stability and growth in Taiwan's financial ecosystem.