Taiwan’s Financial Supervisory Commission (FSC) has rejected CTBC Financial Holding’s proposed USD4.1bn takeover of Shin Kong Financial Holdings, citing insufficient comprehensiveness in the plan and a lack of guarantee to increase capital for Shin Kong’s life insurance unit. The regulator’s decision blocks what would have been Taiwan’s largest financial merger, potentially creating the nation’s biggest financial group. The FSC’s rejection paves the way for a possible merger between Shin Kong and Taishin Financial Holding, pending shareholder approval. Taishin has offered a share swap deal valued at around USD7bn, which, if successful, would form Taiwan’s fourth-largest financial group. The proposed merger aims to strengthen competitiveness in Taiwan’s financial sector amid increasing market consolidation.