The Financial Supervisory Commission (FSC) plans to introduce more measures to boost the local stock market, where transactions have contracted 10 percent over the past decade as other regional bourses have seen a significant increase, commission Chairman William Tseng (曾銘宗) said yesterday.
“The commission, stock exchange and related agencies are studying the causes behind the sluggish trading and will prioritize finding solutions [to the problem] for next year,” Tseng told the legislature’s Finance Committee, as the market remained unresponsive to a recent series of stimulus measures.
The TAIEX gained a modest 0.69 percent to 8,980.67 yesterday on light turnover of NT$68.74 billion (US$2.24 billion), Taiwan Stock Exchange data showed, far below Tseng’s target of NT$110 billion.
Tseng said authorities would, if necessary, ease investment rules further to invigorate trading.
Retail investors — the backbone of the market — account for about 60 percent of total turnover, down from 75 percent in the past, which Tseng said reflects generally weak sentiment among investors.
However, the local bourse is likely to stabilize after digesting news about the free-trade pact between China and South Korea, he said, citing recent fund flows.
As of Monday, foreign funds reached US$191.5 billion, representing a net increase of US$1.3 billion from the end of last month, Tseng said.
Foreign players make up about 25 percent of total trading on the local bourse.
Meanwhile, the commission is to facilitate the internationalization of the local stock market by introducing a connection scheme with the Singaporean bourse in the first half of next year, Tseng said, adding that the link may be extended to Japan and London in the second half.
Tseng, who recently flew to the US for talks on a tax compliance issue, also said the two sides may ink an agreement early next year after Taipei agreed to accommodate Washington’s request.
At issue is the Foreign Account Tax Compliance Act, which will make it more difficult for US taxpayers to conceal assets held in offshore accounts and shell corporations.
If implemented, the tax agreement would affect 4,273 accounts, Tseng said.
Uncooperative financial institutions will be asked to withhold 30 percent of the income earned by US citizens at their offices in the US, Tseng said.
About 100 countries have either participated in the act or worked out agreements with the US on the issue.
The act requires the foreign financial institutions of signatory countries to surrender information related to US citizens’ ownership of assets held overseas.
Washington has agreed to talks about providing reciprocal information on Taiwanese with assets in the US, Tseng said.
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