Taiwan will open its stock and futures markets to qualified direct institutional investors (QDIIs) from China later this year in a bid to attract more foreign investment to help prop up the nation’s financial markets, Vice Premier Paul Chiu (邱正雄) said yesterday.
The move is expected to lead to an influx of US$1.12 billion into the stock market in the first year, estimates from industry observers showed.
The scope of what Chinese QDIIs will be allowed to trade is expected to be announced in one or two months, Chiu said at a forum on a financial memorandums of understanding (MOU) across the Taiwan Strait and financial reform.
Meanwhile, Financial Supervisory Commission (FSC) Chairman Sean Chen (陳冲) said at a legislative session that the commission, in collaboration with the central bank, would map out regulations to pave the way for Chinese QDIIs to invest in the nation’s financial markets, such as whether they will have the right to act as members of the board of directors or as supervisors.
After Taiwan and China sign MOUs on cooperation in the supervision of banking, securities and insurance, China is also expected to lift its cap on QDII investment in Taiwan from 3 percent to 10 percent of QDII funds, which is estimated to be approximately NT$30 billion.
If QDIIs buy shares in financial institutions, a cap on the size of the investment will be imposed by Taiwan, Chen said.