By: Tsai Yi-chu and Frances Huang
Taipei, Dec. 1 (CNA) The Financial Supervisory Commission (FSC), the top financial regulator in Taiwan, said on Thursday that it has imposed fines on two banks for malpractice in the trading of target redemption forwards (TRFs).
This is the fourth time the FSC has fined banks for malpractice in the sale of risky TRF to local investors since April 2014.
The latest two banks, DBS Bank Taiwan and Taishin International Bank (台新銀行), face fines of NT$10 million (US$313,480) and NT$8 million, respectively, the FSC said.
TRFs are a type of option with a better rate of return but also higher risks, that have become popular in Taiwan as investors pursue greater profits. However, the sale of this financial derivative product sparked an outcry after the Chinese yuan plunged against the U.S. dollar, resulting in massive losses for investors who bought TRFs, which bet on a higher yuan. [FULL STORY]