The Financial Supervisory Commission (FSC) yesterday announced deregulation plans that will allow domestic securities houses to broaden their services to customers in Taiwan and boost competitiveness abroad.
Securities houses may trade offshore securities issued or distributed by the Chinese government and companies of their own accord as well as for Taiwanese customers, the commission said in a statement.
The liberalization is the government’s latest move to deepen cross-strait financial ties and will take effect after going through routine administrative procedures, the commission said
The 42 brokerages already involved in foreign securities trading are all qualified for the business expansion, it said.
The commission also said it would ease restrictions governing investments by securities houses in venture capital firms and other companies to widen their sources of earnings. Brokerages will be allowed to take up to a 100 percent stake in venture capital firms and venture capital consultancies, the commission said. Currently, there is a 25 percent cap on such investments.
The move would allow securities houses greater flexibility in fund allocation as long as they keep total investment funds within 40 percent of their net worth, the commission said.
The ceiling is 20 percent for investments not linked to securities or futures businesses, it said.
Meanwhile, the commission said in a separate statement that it held a meeting yesterday with heads of foreign banks in Taiwan to gain a better understanding of their operations and policy recommendations.
It said it would take into consideration the bank’s suggestions on developing financial services.
Last month, the commission met with top executives from domestic financial institutions to learn more about their finances and cross-strait expansion plans.
In other developments, Fubon Financial Holding Co (富邦金控), the nation’s second-largest financial services provider, yesterday said its life insurance unit had been awarded qualified foreign institutional investor (QFII) status, which would allow it to directly invest in Chinese securities.
The company said in a filing to the Taiwan Stock Exchange that Fubon Life Insurance Co (富邦人壽) had secured the QFII license from the China Securities Regulatory Commission.
The life insurer still has to wait for an investment quota from China’s State Administration of Foreign Exchange before it can help Taiwanese customers invest in yuan-denominated financial products, including A-shares, corporate bonds and bank debentures.
Fubon Asset Management Co (富邦投信), Fubon Financial’s asset-management unit, secured a quota of US$100 million as a QFII investor in October 2010.
Fubon’s announcement came as several Taiwanese life insurers have either received QFII licenses or gained an investment quota from China.
On Thursday last week, Shin Kong Life Insurance Co (新光人壽), a flagship unit of Shin Kong Financial Holding Co (新光金控), said it received approval from China’s foreign exchange authority to invest up to US$100 million in Chinese securities, making it the first Taiwanese life insurer to invest in Chinese securities.
That same day, Cathay Life Insurance Co (國泰人壽), the nation’s largest life insurer, said it gained a QFII license from China.
The life insurer and its asset management affiliate, Cathay Securities Investment Trust (國泰投信), both under Cathay Financial Holding Co (國泰金控), are now applying for investment quotas from China’s foreign exchange authority.
Taiwan Life Insurance Co (台灣人壽) and China Life Insurance Co (中國人壽) have also secured QFII status to access China’s stock market.
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