The Financial Supervisory Commission (FSC) said yesterday it would consider easing capital requirements for financial companies, allowing domestic securities brokerages, futures and investment and trust firms to better utilize their funds.
FSC Vice Chairman Wu Tang-chieh (吳當傑) made the announcement after a meeting between FSC chairman Chen Yuh-chang (陳裕璋) and 20 executives from local brokerages, futures and investment and trust companies.
“The commission will soon review the possibility of lowering loss provisions, special reserves and capital limits on overseas investment as proposed by the firms,” Wu said.
Yesterday’s meeting was the second face-to-face meeting between Chen and local financial representatives in 10 days. On Aug. 25, Chen met executives from financial holding companies and banks to discuss investment in China, prompting the commission to approve local financial firms owning a controlling stake in finance leasing or venture capital companies in China, the next day.
Such meetings were considered necessary as many local financial firms have expressed concern over new accounting rules, overseas competition and cross-srait financial links.
Securities brokerages yesterday called on the FSC to allow them to invest up to 40 percent of their net worth, instead of paid-in capital, in overseas investments, as most have larger net worth than paid-in capital, Wu said.
Wu said the commission is likely to consider this favorably as all brokerages meet the minimum 200 percent requirement on risk-based capital ratios with some posting as much as 400 percent or 500 percent.
The commission also agreed to consider lowering default and loss provision as well as special reserve thresholds, Wu said.
Futures companies urged the commission to help reduce the transactions tax, saying a cut could boost the national treasury through increased turnover.
Wu said the commission shared their view and would talk to the Ministry of Finance on the matter.
As for China, Wu said the commission would bring up the issue at future cross-strait talks as the matter needs to be approved by China.
The commission chairman will meet with heads from local insurance companies in a week or two, Wu said.