The Financial Supervisory Commission (FSC) yesterday announced plans to deregulate local bond and fund markets to attract foreign investment.
To that end, the commission said it intends to exempt offshore funds from meeting the registration and custodian requirements needed to buy foreign currency-denominated bonds and funds in Taiwan.
The commission has sought to invigorate the offshore yuan bond market by promoting Formosa bonds in the manner of Hong Kong’s popular dim sum bond.
It added that domestic securities houses may soon get to act as custodian institutes for offshore funds since currently, foreign investors and overseas locals have to carry out bond and securities dealings via designated institutes with the commission’s prior approval.
If local securities houses are allowed to act as custodian institutes, they would have the motivation to offer improved, diversified services and would likely see revenues rise, the commission said.
The commission added that it also intends to scrap restrictions that limit capital raised overseas by local fund houses to be used on the issuers, since there is a low risk of management rows.
The deregulating moves would cut investment costs and streamline procedures for foreign funds, increasing their incentives to play in the local bond and fund markets, which would boost sales of local funds based in foreign currencies, the commission said.
Separately, the commission has fined Taishin International Bank (台新銀行) NT$6 million (US$199,200) for the lax safety controls in the contract it inked with its credit card technology provider.
The contract does not stipulate emergency responses or related compensations in the event of unexpected service termination.