FSC approves Shin Kong's purchase of stake in MasterLink

The Financial Supervisory Commission yesterday gave a green light to Shin Kong Financial Holding Co (新光金控), the nation's eighth-largest financial group by assets, to buy a 16 percent stake in MasterLink Securities Corp (元富證券) within the next year.

"The commission is positive about seeing investment applications or merger and acquisition cases that can create synergies," Financial Supervisory Commission spokesperson Susan Chang (張秀蓮) told a press conference yesterday.

Shin Kong Financial applied in July to buy a 16 percent stake in MasterLink for about NT$3 billion (US$91 million) in the open market within the next 12 months, hoping to team up with the securities house to cross-sell its banking and insurance products.

At the end of June, the financial group's flagship unit Shin Kong Life Insurance Co (新光人壽) controlled a 9 percent stake in MasterLink, the nation's 10th-biggest brokerage.

According to the regulations of the Financial Holding Company Act (金融控股公司法), a financial holding firm can include an invested company as a subsidiary, as long as the financial group alone holds a 25 percent stake or the group and its subsidiaries jointly control a majority of the invested target's board seats.

Therefore, Shin Kong Financial could include MasterLink within its group if the company and its insurance arm can together secure half of the brokerage's board seats in a new selection slated for next year, or acquire its insurance unit's 9 percent stake on the top of its own 16 percent holding.