Fri, Jun 21, 2013 - Page 14 News List

FSC looking to boost Formosa bonds market

By Crystal Hsu  /  Staff reporter

The Financial Supervisory Commission (FSC) said yesterday it is mulling easing regulatory measures to promote the offshore yuan bond market.

The watchdog’s response came after pleas for the commission to adopt a two-track supervision mechanism allowing institutional investors to take on more risk, as they have more resources and better understand the market.

By contrast, individual players need more protection given their lack of professional knowhow, foreign trade groups have said.

The commission said it is receptive to loosening credit rating requirements so that more companies are qualified to issue Formosa bonds (offshore yuan bonds).

The regulator added it would also study measures to attract more domestic and overseas issuers, and streamline review procedures to cut issuance costs and boost the number of transactions.

Separately, the commission approved plans by Shin Kong Commercial Bank (新光銀行), the banking arm of Shin Kong Financial Holding Co (新光金控), to set up a branch in the Vietnamese province of Binh Duong, as the lender seeks to deepen its presence in the emerging market.

Shin Kong Bank has a representative office in Ho Chi Minh City.

The lender aims to serve Taiwanese companies operating in Vietnam, the commission said.

The regulator also gave China Construction Bank Corp (中國建設銀行) business permissions for its Taipei branch, including handling deposits, savings, lending and trade financing.

China Construction is the world’s sixth-largest bank in terms of tier-one capital and it ranks 12th by assets, the commission said. The bank’s capital adequacy ratio rose to 14.32 percent last year from 13.68 percent in 2011, helped by a 40 billion yuan (US$6.44 billion) bond issue.

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