Fri, Dec 28, 2018 - Page 12 News List

FSC raises ceiling on offshore funds’ Chinese holdings

GLOBAL FACTORS:The policy change came in the footsteps of MSCI Inc’s announcement that it is to raise China’s weighting to 2.83% by August next year

By Kao Shih-ching  /  Staff reporter

The Financial Supervisory Commission (FSC) yesterday raised the ceiling on funds that offshore fund managers can invest in Chinese stocks up to 40 percent of their net value.

The relaxation came after global index provider MSCI Inc announced a plan to raise China’s weighting in its Emerging Markets Index from 0.71 percent in September to 2.82 percent in August next year, Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told a news conference yesterday.

Offshore financial institutions would be allowed to invest up to 20 percent of their net asset value in the Chinese equities market, from 10 percent now, Tsai said.

Seven offshore funds that were promoted by the commission’s “plan to encourage stronger business ties in Taiwan for offshore funds” would benefit most from the relaxation, as they would see the ceiling raised to 40 percent from 30 percent, Tsai said.

These institutions include AllianceBernstein Taiwan Ltd (聯博投信), Allianz Global Investors Taiwan Ltd (安聯投信), Schroder Investment Management Taiwan (施羅德證券投資), Eastspring Investments (瀚亞投資), JPMorgan Asset Management Taiwan Ltd (摩根資產管理), Fidelity Investment Taiwan Ltd (富達證券投信) and Franklin Templeton Investments (富蘭克林鄧普頓基金), the commission said.

A total of 128 out of 1,034 funds in the nation have invested in China-listed A-shares that were valued at NT$10.7 billion as of September, the commission said.

With the new ceiling, offshore fund managers are expected to overweigh the Chinese equities market, leading to higher investments of NT$27.7 billion (US$899.3 million), it said.

One fund was removed from operation this year, as its investments in the Chinese stock market exceeded 10 percent of its net value, the FSC said.

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