Fri, Jul 22, 2016 - Page 12 News List

Firms to see easier access to European capital: FSC

By Ted Chen  /  Staff reporter

Taiwanese companies are to see reduced hurdles in accessing Europe’s capital markets, as the nation’s accounting and secrecy standards have been given “adequacy” status by the European Commission, the Financial Supervisory Commission (FSC) said yesterday.

The newly approved status, which came into effect on June 21, will likely reduce redundant auditing procedures between the two sides, and reduce the time and cost to issue European global depositary receipts (GDRs), the FSC said.

Sixty-six Taiwanese companies have issued GDRs in Europe, with most of the instruments listed on the Luxembourg bourse, it said.

“Accounting reports represent a significant part of the process before local companies can access the capital markets of foreign countries. The new status will expedite much of the procedure,” Securities and Futures Bureau Deputy Director-General Sam Chang (張振山) said at a news conference.

The European Commission’s ruling implies that a level of trust on the regulatory and accounting standards on the two sides has been established, Chang said.

Therefore, a local company that has a proven track record of conforming to Taiwan’s accounting standards will no longer need to be audited by European authorities, Chang said, adding that the commission would be able to expand collaborative efforts with its peers in European member states.

Taiwan gained “accounting equivalency” status with the European Commission on Aug. 1, 2012.

As of last month, Taiwanese companies had issued about NT$38.9 billion (US$1.21 billion) of GDRs, FSC data showed.

The FSC said that while Hong Kong, Singapore and China had filed applications to gain “adequacy” status at the same time as Taiwan, they have yet to receive approval from the European Commission.

In related news, Chang said that the Taiwanese market is impervious to “spoofing,” where rogue traders attempt to profit from deceptive market orders that can compromise the integrity of a stock or futures exchange.

This is because orders placed on Taiwan’s futures and stock exchanges are matched approximately every 5 seconds, which is too slow for the high-speed spoofing activity to operate in, Chang said.

He said that the 10 percent daily limit is also a deterrence to irregular trading.

The bureau is aware that a trader has been sentenced to three years for spoofing this month by a US court, he said.

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