Taiwanese banks receive boost on Chinese securities

By Kevin Chen  /  Staff reporter

Fri, Oct 05, 2012 - Page 14

The Financial Supervisory Commission (FSC) yesterday said it had amended its regulations governing investment by Taiwanese banks in Chinese securities. The new rules are expected take effect later this month.

The commission said in a statement on its Web site that the new regulations are designed to provide domestic lenders with more investment channels, while helping enhance the efficiency of fund utilization.

Under the amended regulations, Taiwan’s commercial banks will be allowed to invest in Chinese securities, including government notes and bonds, as well as stocks and corporate bonds issued by Chinese companies.

The commission said it would soon release the amended regulations for public review for seven days, and would weigh up both public and administrative views before implementing the new regulations later this month.

The latest regulatory easing is part of the commission’s plans to develop a financial platform for cross-strait financial services and allow Taiwanese investors to take advantage of China’s fast-growing economy.

On Sept. 27, the commission said it was removing the cap on investment by Taiwanese onshore fund companies in Chinese securities to give them more flexibility to meet the needs of investors.

The moves came after Taiwan and China signed a memorandum of understanding (MOU) on a currency settlement agreement on Aug. 31.

That paved the way for yuan-based financial products and services that Taiwanese banks are keen to develop as new cross-strait opportunities arise.