FSC Establishes "Trust 2.0 Phase 2 Plan Evaluation and Incentive Measures" to Continuously Encourage Trust Enterprises to Develop Progressive Trust Services
2023-04-06
The Financial Supervisory Commission (“the FSC”) published Phase 2 of the Trust 2.0 "Comprehensive Trust" Implementation Plan (the Trust 2.0 Phase 2 Plan) in September 2022 to encourage trust enterprises to continue enhancing trust service. To continue providing suitable incentives, the FSC referenced the recommendations of the Trust Association of R.O.C. (“the Trust Association”) and recently published the "Trust 2.0 Phase 2 Plan Evaluation and Incentive Measures" (implemented from January 1,2023 to December 31,2024 in 2 phases).
The incentives are the continuation of the evaluation and incentive mechanisms in Phase 1. The FSC also set up 5 awards including the "Best Trust Award", "Elderly Care Trust Award", "Employee Benefit Trust Award", "Trust Business Innovation Award", and "Trust Alliance Award" based on the core objectives and important measures in the Trust 2.0 Phase 2 Plan. The main adjustments are as follows:
1. Introduction of the "Trust Alliance Award": To encourage trust enterprises to expand and strengthen cross-industry alliances for trusts, the FSC set an independent award for the evaluation and incentives of promoting cross-industry alliances for the specific actions, innovation, and public interest.
2. Evaluation criteria for the "Best Trust Award": The Trust 2.0 Phase 2 Plan already included the "Enhance the knowledge and understanding of trust services for elderly, people with dementia and disabilities" as a core objective. To encourage trust enterprises to actively promote and implement dementia-friendly measures as well as to expand related financial services for the elderly and the disabled, the FSC added the measures for friendly treatment of elderly customers and those with dementia or disabilities as an evaluation item, which includes "the establishment of a friendly financial environment" and "the supply of friendly financial services". In addition, to encourage trust enterprises to develop trust services that meet the needs of settlors, the FSC referenced the recommendations of the Trust Association and added the development for the trust business with power to decide the allocation of trust assets (discretionary) as an item for which additional points may be awarded.
3. Evaluation criteria for the "Elderly Care Trust Award": The elderly care trust system has achieved significant results since the promotion in 2016. However, the FSC found that trust enterprises generally focused more on elderly care trusts. To encourage trust enterprises to actively develop trust services for people with disabilities, the evaluation criteria have been adjusted to separately evaluate the promotion of trusts for the elderly and for people with disabilities. The FSC also added "the planning and promotion of care trust for people with disabilities" as an evaluation item.
4. Evaluation criteria for the "Employee Benefit Trust Award": To encourage financial institutions and their affiliated groups (including financial holding companies and others) to set up employee benefit trusts and serve as role models for other enterprises, the FSC added "the establishment of the employee benefit trust system for trust enterprises and their groups" as an item for which additional points may be awarded. As equity reward instruments distributed by companies (e.g., employee stock warrants) are also parts of employee welfare plans, the FSC also referenced the recommendations of the Trust Association and added "trusts for employee equity reward instruments" as an item for which additional points may be awarded.
5. Evaluation criteria for the "Trust Business Innovation Award": The evaluation items are the same as the incentives in the Phase 1 Plan. The FSC conducts comprehensive evaluations based on the benefits or integrity of innovative businesses or services.
During the implementation period of the incentives, the Trust Association shall invite reputable organizations or academics and experts to conduct the evaluations. The FSC shall select enterprises with excellent performance for commendation and provide incentives such as automatic approval for related trust businesses.
The FSC stated that the Trust 2.0 Plan has made significant progress in terms of cross-industry alliances, regulations and self-regulatory rules, talent development, and quality of business in over two years after its launch. The FSC hopes that the evaluations and incentives in the Phase 2 Plan, on the basis of the established foundations of comprehensive trust services, can continue helping trust enterprises to develop progressive trust services, and reach the core objectives in the Phase 2 Plan to support customers with their needs in different stages of life, expand and intensify cross-industry alliances for trusts, enhance the knowledge and understanding of trust services for the elderly and people with dementia and disabilities, and improve the measures to treat them with friendliness.
The incentives are the continuation of the evaluation and incentive mechanisms in Phase 1. The FSC also set up 5 awards including the "Best Trust Award", "Elderly Care Trust Award", "Employee Benefit Trust Award", "Trust Business Innovation Award", and "Trust Alliance Award" based on the core objectives and important measures in the Trust 2.0 Phase 2 Plan. The main adjustments are as follows:
1. Introduction of the "Trust Alliance Award": To encourage trust enterprises to expand and strengthen cross-industry alliances for trusts, the FSC set an independent award for the evaluation and incentives of promoting cross-industry alliances for the specific actions, innovation, and public interest.
2. Evaluation criteria for the "Best Trust Award": The Trust 2.0 Phase 2 Plan already included the "Enhance the knowledge and understanding of trust services for elderly, people with dementia and disabilities" as a core objective. To encourage trust enterprises to actively promote and implement dementia-friendly measures as well as to expand related financial services for the elderly and the disabled, the FSC added the measures for friendly treatment of elderly customers and those with dementia or disabilities as an evaluation item, which includes "the establishment of a friendly financial environment" and "the supply of friendly financial services". In addition, to encourage trust enterprises to develop trust services that meet the needs of settlors, the FSC referenced the recommendations of the Trust Association and added the development for the trust business with power to decide the allocation of trust assets (discretionary) as an item for which additional points may be awarded.
3. Evaluation criteria for the "Elderly Care Trust Award": The elderly care trust system has achieved significant results since the promotion in 2016. However, the FSC found that trust enterprises generally focused more on elderly care trusts. To encourage trust enterprises to actively develop trust services for people with disabilities, the evaluation criteria have been adjusted to separately evaluate the promotion of trusts for the elderly and for people with disabilities. The FSC also added "the planning and promotion of care trust for people with disabilities" as an evaluation item.
4. Evaluation criteria for the "Employee Benefit Trust Award": To encourage financial institutions and their affiliated groups (including financial holding companies and others) to set up employee benefit trusts and serve as role models for other enterprises, the FSC added "the establishment of the employee benefit trust system for trust enterprises and their groups" as an item for which additional points may be awarded. As equity reward instruments distributed by companies (e.g., employee stock warrants) are also parts of employee welfare plans, the FSC also referenced the recommendations of the Trust Association and added "trusts for employee equity reward instruments" as an item for which additional points may be awarded.
5. Evaluation criteria for the "Trust Business Innovation Award": The evaluation items are the same as the incentives in the Phase 1 Plan. The FSC conducts comprehensive evaluations based on the benefits or integrity of innovative businesses or services.
During the implementation period of the incentives, the Trust Association shall invite reputable organizations or academics and experts to conduct the evaluations. The FSC shall select enterprises with excellent performance for commendation and provide incentives such as automatic approval for related trust businesses.
The FSC stated that the Trust 2.0 Plan has made significant progress in terms of cross-industry alliances, regulations and self-regulatory rules, talent development, and quality of business in over two years after its launch. The FSC hopes that the evaluations and incentives in the Phase 2 Plan, on the basis of the established foundations of comprehensive trust services, can continue helping trust enterprises to develop progressive trust services, and reach the core objectives in the Phase 2 Plan to support customers with their needs in different stages of life, expand and intensify cross-industry alliances for trusts, enhance the knowledge and understanding of trust services for the elderly and people with dementia and disabilities, and improve the measures to treat them with friendliness.
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2023-05-30