FSC to amend regulations on cross-strait securities market transactions

By Camaron Kao  /  Staff reporter, with CNA

Mon, Feb 18, 2013 - Page 13

The Financial Supervisory Commission (FSC) yesterday said it was amending its regulations regarding Taiwanese securities firms’ transactions on securities markets in China.

The move is part of the government’s efforts to facilitate the growing number of economic and financial exchanges across the Taiwan Strait. It also comes after financial regulators from Taiwan and China agreed last month on new investment measures to boost the securities sector.

“The move will provide securities firms and investors with more overseas investment channels, while helping expand cross-strait financial businesses for securities firms,” the commission said in a press release posted on its Web site yesterday.

In the future, local brokerage firms would be able to either trade on the securities markets in China themselves, or serve as agents of other investors to buy and sell securities in China, the commission said.

Furthermore, the commission said this move would attract more investors to Taiwan, and in turn local brokerage firms would gain business opportunities.

Chinese securities include government notes and bonds, as well as stocks and corporate bonds issued by Chinese companies.

The commission did not provide a timetable for easing the regulations.

However, based on past experience, the commission is likely to release the amended regulations for public review for seven days, and weigh up both public and administrative views, before implementing the new regulations later this month.

Local brokerages and investors have long expressed their wish to invest in securities in foreign markets, and have been looking for opportunities in the Chinese market.

On Jan. 29, the commission and China Securities Regulatory Commission held a meeting in Taipei on the cross-strait financial supervisory platform for securities and futures trading, with the two sides agreeing to allow a limited number of Taiwanese securities firms to conduct business in some Chinese cities.

Based on the meeting’s conclusions, China could issue three full-service securities firm licenses to Taiwanese firms to set up joint ventures in Shanghai, Shenzhen and Fujian Province.

Taiwanese investors will be allowed to hold up to a 51 percent stake in the joint ventures.

Chinese regulators might also allow Taiwanese securities firms to set up a single joint venture in one of six other cities, such as Pudong, Chongqing and Quanzhou, in which they will be allowed to hold up to a 49 percent stake.

Analysts said the new regulations would likely benefit large brokerage houses such as Yuanta Securities (元大證券), Fubon Securities Co (富邦證券) and KGI Securities Co (凱基證券), because they would have a better chance of obtaining the licenses once the new measures take effect.