Fidelity struggles to bring open funds architecture to Asia

The battleground: Taiwan. The stakes: dominance in selling offshore mutual funds. The fight: globalization vs guanxi.

A battle royale has broken out in Taiwan between Fidelity Investments and the more established mutual fund companies that will determine the course of mutual fund distribution to Taiwan's huge retail market. Fidelity says local players are using their leverage with regulators to bury its plans to introduce a more competitive and fair playing field. Rival fund managers say Fidelity is playing fast and loose with regulatory loopholes, and deserves to be thwarted by the Securities and Futures Commission SFC.

But this is also a fight between two cultures. Fidelity, which is the second biggest provider of offshore funds in Taiwan, is trying to revolutionize the business by importing a successful American model. Representing...

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