Taiwan regulator probes firms for pressuring staff to sell ETFs

[TAIPEI] Taiwan’s financial regulator is probing 20 financial institutions over how they pushed staff to sell exchange-traded fund (ETF) products, the latest sign of excessive competition in one of Asia’s biggest ETF markets.

The Financial Supervisory Commission (FSC) will probe ten brokerages, nine asset managers and a bank for allegedly pressuring staff to meet sales quotas for newly launched ETFs, said Huang Hou-ming, deputy director-general of the FSC’s Securities and Futures Bureau. The regulator received complaint letters from employees across the firms, he said.

The probe comes after Taiwanese investors emerged as the biggest buyer of bond ETFs in Asia last year, with the bulk of their money pouring into US debt. Volatile markets caused by US President Donald Trump’s tariff policies have increased competition for financial firms selling ETFs, with Taiwanese stocks entering a bull market earlier this month after a record sell-off in April.

More than 100 complaint letters alleged that financial institutions forced employees to be responsible for selling a certain quota of new ETFs, the Taipei-based Economic Daily News reported earlier, citing the regulator.

The probe will encompass know-your-customer rules, examining whether institutions strictly implemented customer background checks and ensured that staff were selling appropriate products, the report said. It will also look at whether staff compensation takes into account non-financial elements, such as employees’ compliance with regulatory rules, according to the report.

ETFs have been popular investment vehicles for Taiwanese for years, including for people who cannot afford real estate on the island, though the market has seen slowdowns previously. BLOOMBERG