To internationalize the nation's securities market and boost its competitive edge, the financial regulator is beefing up efforts to, hopefully, entice US$10 billion to US$40 billion of overseas capital into the market, government officials said yesterday.
One of the government's measures to increase foreign buying in the domestic investment market is to help Taiwan become classified among "developed markets" by the FTSE Group, Kong Jaw-sheng (龔照勝), chairman of the Cabinet-level Financial Supervisory Commission, told lawmakers yesterday.
The global index provider FTSE, which originated as a joint venture of the Financial Times and the London Stock Exchange, is scheduled to release a country categorization report in September.
To push the upgrading, the commission will soon set up a task force to improve the nation's share-trading measures and launch international publicity campaigns, Kong said.
To be classified as a developed market, Taiwan will have to meet over 20 criteria, which the Taiwan Stock Exchange Corp and the Securities and Futures Bureau are constantly reviewing for improvement, according to the commission's vice chairman, Lu Daung-yen (呂東英).
This approach is expected to further boost the nation's competitive advantage after the US Securities and Exchange Commission recognized Taiwan Stock Exchange Corp as a designated offshore stock market at the end of last year, Kong said.
In addition, Morgan Stanley Capital International (MSCI) Inc is considering raising Taiwan's limited investment factor to 100 percent from the current 75 percent in May. The re-weighting to make the stock market value fully represented in the MSCI indices could garner the local bourse as much as US$35 billion worth of funds, Merrill Lynch estimated last year.
Lehman Brothers Inc also plans to include the Taiwan Government Bond Index in their international bond indices by the year-end, which can largely increase the nation's exposure to overseas investors, according to the commission.
With all these internationalization factors taking effect, Taiwan's investment environment will be more liberalized and be conducive to allowing foreign capital to make long-term asset allocation investment strategies in Taiwan, Kong said.
These measures are expected to lure a cash inflow of between US$10 billion and US$40 billion into the nation's market, he said.
During the interpellation session yesterday, Kong also reported that the commission has sent amendments to several financial bills for legislative review.
These bills include amendments to the Securities Exchange Law (證券交易法), the Resolution Trust Committee Fund Regulatory Provisions(金融重建基金設置及管理條例), the Certified Public Accountant Law (會計師法), the Banking Law (銀行法) and the Financial Holding Company Act (金融控股公司法).
The amendments to the Resolution Trust Committee Fund Regulatory Provisions were blocked last session in the legislature. The financial regulator hopes to see the amendments passed this session in a bid to expand the size of the Financial Restructuring Fund (
Vowing to build a solid and healthy financial sector, Kong said the commission is strengthening financial systems to put an end to corporate scandals, and mapping out measures to stabilize the bond fund market.