The Financial Supervisory Commission (FSC) plans to allow local companies to issue yuan-denominated bonds through Taiwanese banks’ offshore banking units (OBUs) to finance their Chinese operations, making it easier for local firms to raise funds, commission Chairman Chen Yuh-chang (陳裕璋) said yesterday.
Chen made the remarks during his reappointment ceremony.
“The proposed opening will help Taiwanese firms meet their need for yuan when they invest and conduct business in China,” Chen said.
Under current regulations, Taiwanese firms cannot issue yuan-denominated corporate bonds in markets at home or abroad. It is difficult for Taiwanese firms with operations in China, especially for small and medium-sized enterprises, to raise funds in China.
Because issuance of bonds offshore involves foreign currency settlements, the commission needs to discuss the matter with the central bank, Chen said, adding that the central bank is receptive of the commission’s plan.
Chen also said the commission’s priority in the future was to create a favorable environment for local financial institutions to develop and to better protect the rights of financial product consumers.
The FSC chairman also pledged to press ahead with the task of developing special cross-strait financial businesses by easing wealth and asset management rules.
Once Taiwan and China work out a currency settlement mechanism, Chen said the commission would consider extending yuan operations from OBUs to domestic banking units (DBUs).
“The two sides are making progress in talks over yuan settlement,” Chen said, without giving further details.
There is no timetable for his meetings in Taipei with his Chinese counterparts yet, Chen said. The meeting was formerly scheduled to take place in the first half of the year.
The commission also promised to help local financial institutions speed up expansions, including establishing branches in China, while easing rules to allow overseas Taiwanese firms to be listed in the local equity markets, Chen said.
Chen headed First Financial Holding Co (第一金) before taking up the leadership at the FSC in May 2010. Prior to that, he worked as chairman of the EasyCard Corp (悠遊卡公司).