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Creating TAIEX sub-market tops FSC agenda

The plan to launch a new stock market to attract listings by overseas companies will be one of the financial regulator's top priorities next year, Financial Supervisory Commission (FSC) Chairman Hu Sheng-cheng (胡勝正) told a year-end press briefing yesterday.

"To expand the scale of our stock market, we plan to attract overseas start-up companies to list on the over-the-counter GRETAI Securities Market as the first step," Hu said.

The local stock market will open to multinational corporations that meet certain requirements to go public here, Hu said.

Hu did not elaborate on the requirements, saying only they "will be lower."

Local media reported earlier this month that a sub-market of the TAIEX would be launched soon, allowing Taiwanese small and medium-sized enterprises with operational bases in other Asian countries to raise funds from the world's institutional investors.

The TAIEX sub-market will first target Taiwanese SMEs with operational bases outside of China, such as those in Vietnam, with between NT$50 million (US$1.6 million) and NT$600 million in capital, Hu was quoted as saying at the time.

But Hu did not give a timetable yesterday, saying "the new market is still in the planning stage."

Hu also vowed to improve the domestic financial market's international competitiveness by encouraging domestic banks to invest overseas while strengthening the operation of their official banking units (OBUs) as regional fund-raising hubs.

OBUs will be allowed to operate foreign currency-denominated checking account businesses, except for yuan-denominated operations, the commission said in a press statement.

When asked whether the regulator would relax restrictions on domestic banks eyeing the Chinese market, Hu said "the hurdle lies on the Chinese side."

He said that Beijing appeared to have no intention of inking an agreement to create a cross-strait financial regulatory mechanism so that the financial market can be opened.

"I'd like to urge China to sit down and talk with us," Hu said.

After taking over six debt-ridden banks this year, the commission yesterday touted its sales of four of the troubled banks, including the Enterprise Bank of Hualien (花蓮企銀), which was sold to Chinatrust Commercial Bank (中國信託銀行). The FSC also said it had facilitated acquisitions or capital injections by nine foreign banks.

Two other debt-ridden lenders, however -- Chinfon Bank (慶豐銀行) and Asia Trust and Investment Corp (亞洲信託) -- may be taken over by the regulator if they fail to provide a plan to improve finances or secure investors by the month's end, FSC Vice Chairwoman Susan Chang (張秀蓮) said.

Hu said "a deal may be struck to bail out Chinfon Bank tomorrow [today]."
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