In recent years, Taiwan’s securities market has faced major challenges driven by digitalization and changes in investor behavior. With electronic trading accounting for over 70% of total transactions, online trading has become increasingly prevalent, while investors’ demand for in-person counter services at physical branches has declined. Consequently, securities firms are under growing pressure to transform their traditional operating models.
To reduce operating costs and enhance operational flexibility, the Financial Supervisory Commission (FSC) announced the opening for securities firms to establish simplified branches in July 2025, marking a new chapter in Taiwan’s capital market. In response to the rapidly changing market environment and to assist securities firms in their transformation, the Taiwan Stock Exchange (TWSE) has, since 2016, actively worked with the FSC’s policies and industry needs to implement a multi-phase strategy for branch transformation—continuously refining the regulatory framework to balance market efficiency and investor protection.
Improvement of Securities Firm Branches: The Starting Point of Transformation
As early as 2016, with the rise of digital finance, the Taiwan Securities Association (TSA) established a FinTech Task Force to explore digital transformation measures for securities firms. To help firms adjust their business models and improve service efficiency, the TWSE and the TSA jointly developed the Securities Firm Branch Improvement Program, which was approved by the FSC and officially implemented in January 2017.
The program aimed to loosen rigid operational requirements so that securities firms could manage branches based on their strategic goals and client profiles. Two key policies were introduced. First, the TWSE revised the “Standards Governing the Places of Business and Facilities of Securities Firms and Securities Introducing Brokers”, shifting from a rule-based to a principle-based approach. This change allowed firms to integrate service counters for account opening, document processing, wealth management consultation, and settlement into multi-functional service counters, while outdated and impractical equipment requirements were deleted.
Second, the program permitted branch offices to operate without conducting brokerage business, enabling firms to transform certain locations as specialized service centers—such as wealth management centers or foreign securities branches—thereby diversifying branch functions. It also allowed partial subleasing of business premises to non-financial tenants, enabling securities firms to share space with other industries (e.g., telecommunications, food & beverage, or retail services) under clear demarcation, improving space utilization and enhancing customer engagement. As face-to-face transactions declined, these changes not only reduced operating costs but also created room for branches to offer higher-value advisory and financial services, laying the foundation for subsequent policy developments.
Digital Service Guidelines for Securities Firms: Driving Branch Digitization
To further respond to digital transformation trends, the FSC released the Capital Market Roadmap in September 2020, which outlined concrete measures to “promote digital transformation of securities firms and enhance the digital service capabilities of physical branches.” In alignment with this direction, the TWSE and Taipei Exchange jointly issued the “Directions for Securities Firm's Provision of Digital Services” in 2022, aiming to strengthen firms’ digital service capacity and customer experience, while ensuring cybersecurity and risk management in a sustainable online–offline integrated model.
Under the Directions, securities firms may, based on their business strategies and client needs, establish two types of digital facilities: Digital Experience Areas and Customer Service Centers. The former may be located within a firm’s head office or branch to serve as interactive spaces for online account opening, product demonstrations, and digital engagement; the latter provides remote consultation and customer support services to improve efficiency and service reach. To ensure compliance and investor protection, the Directions prohibit these facilities from conducting brokerage or investment solicitation and require firms to establish cybersecurity protection and internal control systems. Through this framework, securities firms can advance toward a more flexible, innovative, and digitalized financial service ecosystem.
Opening of Simplified Branches: Supporting Taiwan’s Asset Management Hub Vision
Building upon these earlier initiatives, the FSC amended the “Standards Governing the Establishment of Securities Firms” and the “Regulations Governing Securities Firms” on July 18, 2025, officially allowing securities firms to establish or convert existing branches into simplified branches. This reform continues the spirit of branch improvement and digital service enhancement, aiming to help firms adopt more flexible business models, respond to local service needs, and promote inclusive finance.
Simplified branches differ from ordinary branches in scope and function. They are prohibited from engaging in market trading or brokerage of foreign securities and are instead focused on wealth management and client services—such as conducting wealth management activities, facilitating pre–account-opening procedures, promoting brokerage services, and offering general financial consultations. Firms may apply to either establish new simplified branches or convert existing branches, with the required operating bond reduced from NT$5 million to NT$2 million and exemption from contributing to the settlement fund. Each firm may establish up to three simplified branches per year, subject to future review.
The TWSE has simultaneously amended multiple related rules, including the “Operating Rules of the Taiwan Stock Exchange Corporation”, the “Rules for Suspension or Termination, and Application for Resumption, of Securities Firm Operations”, to establish detailed application, reporting, and audit procedures.
The introduction of simplified branches is expected to yield several benefits. For securities firms, it allows for more cost-efficient and flexible resource allocation, enabling them to tailor operations to regional characteristics and client bases while improving responsiveness to market changes. For investors, particularly those in remote areas, simplified branches provide more accessible financial consultation and wealth management services, enhancing convenience and inclusion. Furthermore, by expanding service networks and strengthening investor engagement, firms can enhance brand visibility and competitiveness.
Importantly, this policy also serves as a key component of the FSC’s initiative to position Taiwan as an “Asian Asset Management Center (AAMC).” Simplified branches act as front-line platforms for promoting wealth management and investor education, helping securities firms cultivate long-term client relationships, deepen advisory capabilities, and expand the domestic asset management industry’s scale and depth.
Conclusion
From the 2017 Branch Improvement Program to the 2025 opening of simplified branches, the FSC and TWSE have continually adjusted regulations in line with market developments and industry needs to guide securities firms through structural transformation. These efforts have fostered a multi-layered service network integrating physical and digital operations, enhancing both efficiency and flexibility.
Securities firm branches have thus evolved from transaction-oriented venues into service-oriented financial centers that focus on client engagement and wealth management. Looking ahead, the TWSE will continue to review implementation outcomes and refine regulatory frameworks as needed, with the goal of building a more resilient, competitive, and inclusive Taiwan capital market.