Finance ministry to propose a series of securities revisions

The Ministry of Finance may propose legal revisions allowing the nation's securities houses to become investment banks, Minister of Finance Lin Chuan (林全) said yesterday. Restrictions on the activities of securities companies will be greatly rel-axed, he added.

"The nation's securities brokerages will be allowed to manage sales of preferred bonds and futures," Lin told a press conference late yesterday afternoon.

Pending legislative approval, the ministry's revisions will include a review of the nation's brokerage trading system, which will be brought in line with international standards, Lin said.

Terry Huang (黃天然), general manager of Polaris Securities Group (寶來證券), wasn't overly excited about the ministry's plan.

He said that the nation's brokerage houses have been finding indirect channels to raise capital for overseas re-investments.

But he said the government's deregulatory move "should be slightly advantageous to the nation's brokerages by opening new channels for them to directly manage their capital-raising activities."

The securities relaxation is part of the government's plan to consolidate financial reforms.

"The ministry has mapped out concrete directions to follow for reforming the nation's financial, capital and insurance sectors," Lin said.

In the banking sector, Lin vowed to lower the nation's non-performing loans (NPLs) ratio to below 5 percent by the year's end while speeding up the passage of the Financial Restructuring Fund (金融重建基金) to bail out debt-ridden banks.

Taiwan's NPL ratio stood at 5.68 percent as of June, down from 8.09 percent in April, according to the ministry's statistics. If loans at risk of default or under surveillance are included, the nation's NPL ratio was 7.97 percent as of June.

In the insurance sector, Lin said that the government will facilitate local insurers' plans to branch out into the Asia-Pacific market by tapping into Chinese markets or lifting restrictions on their overseas re-investments.

Lin also vowed to develop the nation's venture capital businesses, saying four government-owned funds will be encouraged to take part in the businesses since institutional investors, which have more access than private investors to market information, operate the funds.