FSC Relaxes Limit for Taiwan Equity Funds and Active ETFs Investing in TSMC to 25%
Taiwan's FSC has eased rules to allow domestic equity funds and active ETFs to invest up to 25% of their net assets in a single stock, provided the company represents over 10% of the market's weight. Currently, only TSMC qualifies.
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- 📰 Published: April 23, 2026 at 19:49
- 🔍 Collected: April 23, 2026 at 20:01 (12 min after Published)
- 🤖 AI Analyzed: April 23, 2026 at 20:11 (9 min after Collected)
(Central News Agency reporter Su Szu-yun, Taipei, 23rd) Currently, the limit for domestic equity funds and active ETFs investing in Taiwan stocks is that holdings in a single company cannot exceed 10% of the net asset value. The Financial Supervisory Commission (FSC) announced today a conditional relaxation: if a listed company accounts for more than 10% of the total Taiwan stock market weight, the 10% investment limit can be waived, though the cap still cannot exceed 25% of the fund's net asset value. The decree takes effect tomorrow.
Based on current conditions, only TSMC, which accounts for more than 10% of the broader Taiwan stock market, is eligible for this new rule.
Huang Chung-hao, Deputy Director-General of the Securities and Futures Bureau at the FSC, stated at a routine press conference today that in May 2025, the 30% limit on single-company investments for passive ETFs will be relaxed to adjust in accordance with the stock's market capitalization weight. Considering the rapid development of the technology industry in recent years, where the market cap weight of some listed companies in Taiwan's overall market continues to increase, the FSC further relaxed today the restriction that domestic equity funds and active ETFs cannot invest more than 10% of their net asset value in a single company's stock.
Huang Chung-hao explained the conditions for this relaxation: assuming a domestic equity fund or active ETF invests in a single company's stock, if that stock accounts for more than 10% of the Taiwan Capitalization Weighted Stock Index, it is exempt from the original 10% investment limit. The investment weight in this individual stock cannot exceed the stock's weight in the Taiwan stock market, and the total investment amount in the individual stock plus the company's financial bonds should be capped at 25% of the fund's net asset value.
According to data, the top three stocks by weight in the Taiwan stock market are TSMC at number one, accounting for about 44.3%; Delta Electronics at number two with 3.48%; and Hon Hai (Foxconn) at number three with 2.54%.
Currently, TSMC is the only stock with a weight exceeding 10% in the Taiwan stock market. Under the new rule, the proportion of domestic equity funds and active ETFs invested in TSMC can exceed the 10% limit. Although TSMC accounts for a high 44.3% of the Taiwan stock market weight, the maximum investment proportion still cannot exceed 25% of the fund's net asset value.
The public is watching closely to see if this deregulation will cause a swarm of Taiwan equity funds and active ETFs to aggressively increase their holdings in TSMC. Huang Chung-hao pointed out that this is not the intention of the relaxation. This move was primarily based on suggestions from the Securities Investment Trust and Consulting Association (SITCA), taking into account practices in other countries. Fund management involves strategic considerations, and the main goal is to avoid restricting their asset allocations.
According to FSC statistics, there are 138 domestic equity funds investing in local stocks with a scale of NT$1.0481 trillion, and 14 active ETFs currently with a total scale of NT$231 billion.
As for how many funds currently investing in TSMC are expected to benefit, Huang Chung-hao noted that there is no specific comprehensive statistic compiled for this.
Regarding the subsequent process, officials explained that the decree takes effect tomorrow, and operators will need to revise their contracts and make announcements afterward, the timing of which will depend on the operators' schedules. (Editor: Yang Lan-hsuan) 1150423
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Based on current conditions, only TSMC, which accounts for more than 10% of the broader Taiwan stock market, is eligible for this new rule.
Huang Chung-hao, Deputy Director-General of the Securities and Futures Bureau at the FSC, stated at a routine press conference today that in May 2025, the 30% limit on single-company investments for passive ETFs will be relaxed to adjust in accordance with the stock's market capitalization weight. Considering the rapid development of the technology industry in recent years, where the market cap weight of some listed companies in Taiwan's overall market continues to increase, the FSC further relaxed today the restriction that domestic equity funds and active ETFs cannot invest more than 10% of their net asset value in a single company's stock.
Huang Chung-hao explained the conditions for this relaxation: assuming a domestic equity fund or active ETF invests in a single company's stock, if that stock accounts for more than 10% of the Taiwan Capitalization Weighted Stock Index, it is exempt from the original 10% investment limit. The investment weight in this individual stock cannot exceed the stock's weight in the Taiwan stock market, and the total investment amount in the individual stock plus the company's financial bonds should be capped at 25% of the fund's net asset value.
According to data, the top three stocks by weight in the Taiwan stock market are TSMC at number one, accounting for about 44.3%; Delta Electronics at number two with 3.48%; and Hon Hai (Foxconn) at number three with 2.54%.
Currently, TSMC is the only stock with a weight exceeding 10% in the Taiwan stock market. Under the new rule, the proportion of domestic equity funds and active ETFs invested in TSMC can exceed the 10% limit. Although TSMC accounts for a high 44.3% of the Taiwan stock market weight, the maximum investment proportion still cannot exceed 25% of the fund's net asset value.
The public is watching closely to see if this deregulation will cause a swarm of Taiwan equity funds and active ETFs to aggressively increase their holdings in TSMC. Huang Chung-hao pointed out that this is not the intention of the relaxation. This move was primarily based on suggestions from the Securities Investment Trust and Consulting Association (SITCA), taking into account practices in other countries. Fund management involves strategic considerations, and the main goal is to avoid restricting their asset allocations.
According to FSC statistics, there are 138 domestic equity funds investing in local stocks with a scale of NT$1.0481 trillion, and 14 active ETFs currently with a total scale of NT$231 billion.
As for how many funds currently investing in TSMC are expected to benefit, Huang Chung-hao noted that there is no specific comprehensive statistic compiled for this.
Regarding the subsequent process, officials explained that the decree takes effect tomorrow, and operators will need to revise their contracts and make announcements afterward, the timing of which will depend on the operators' schedules. (Editor: Yang Lan-hsuan) 1150423
Choose to stand with facts, every sponsorship from you is the power to protect press freedom.
Download the CNA "First Hand News" APP to grasp the latest news instantly.
The text, images, and audio/video on this website may not be reproduced, publicly broadcast, or publicly transmitted and used without authorization.