FSC Previews "VASP Registration System" Imminent Launch, All Compliant Firms Will Have to Re-Work!
VASP Registration and AML/CFT Regulations: A Summary of New Draft Rules by the FSC
The Financial Supervisory Commission (FSC) of Taiwan has announced draft regulations regarding the registration and AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism) requirements for Virtual Asset Service Providers (VASPs).
Table of Contents
VASP Registration Draft Rules
This draft rule focuses on four key areas:
1. Business Categories and Separate Registration System: VASPs will need to register based on their specific business category, including virtual asset exchanges, trading platforms, transfer services, custodians, and underwriters (Article 2 & 3).
2. Registration Requirements and Procedures: The draft rule outlines the eligibility criteria, necessary documents, application procedures, and procedures for registration changes, cancellation, or revocation.
3. Business Management: VASPs must adhere to a set of management regulations, including information system security, customer complaint handling, disclosure, and record-keeping. The FSC has also outlined specific compliance requirements for different VASP categories.
4. Transitional Provisions: VASPs that have already completed the AML/CFT compliance declaration will have 3 months to register with the FSC after the registration system comes into effect. They must complete registration within 9 months of the rule's implementation (Article 30).
Key Point: The existing compliance declaration system will be abolished upon the implementation of the VASP registration system. All VASPs, regardless of previous compliance declarations, must register under the new rules. The new registration system will be stricter, potentially posing significant challenges for existing operators.
VASP AML/CFT Draft Revisions
The key revisions to the VASP AML/CFT regulations include:
1. Name Change and Article Revisions: The name of the AML/CFT regulations for VASPs has been changed to "Regulations on Preventing Money Laundering and Combating Terrorism Financing for Businesses or Individuals Providing Virtual Asset Services," with corresponding revisions to the articles (Articles 2-17).
2. Applicability to Registered VASPs: The revised regulations specify that they apply to VASPs that have completed the registration process according to the VASP registration regulations (Article 2).
3. Annual Risk Assessment Reports: VASPs must submit annual risk assessment reports to the FSC (Article 14).
4. Internal Control and Audit: VASPs are required to establish internal control and audit systems based on the AML/CFT Act, Terrorism Financing Prevention Act, VASP Registration Rules, and the self-regulatory guidelines of the virtual currency industry association (Article 15).
5. Removal of Compliance Declaration Requirement: The requirement for VASPs to submit AML/CFT compliance declarations has been removed (Article 17).
Public Consultation: These draft regulations will be published in the Gazette and on the FSC website. The public is invited to submit comments within 30 days from the date of publication on the FSC's "Draft Regulation Announcement" page on their "Regulatory Inquiry System" website or contact the FSC Securities and Futures Bureau.
