Sat, May 12, 2001 page17

• MOF to ease equity rules

  CASH-APPEAL Analysts gave wide approval for plans to increase foreign investment in the stock market by easing rules on the eligibility of foreign equity funds

  • By Tsering Namgyal / STAFF REPORTER
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  Observers lauded the Ministry of Finance and the Securities and Futures Commission's (證期會) decision to further deregulate the stock market for foreign investors.

  The finance ministry said on Thursday it would ease requirements and simplify the application procedures for foreign equity investors to attract more international investment.

  "Any liberalization of the QFII regulations are positive," said Thomas McGowan, an attorney with Russin & Vecchi, an international law firm in Taipei. "Changes are going to make it simpler for smaller foreign institutions to invest in Taiwan."

  The announcement came hours after the release of the widely-watched White Paper by the American Chamber of Commerce (AmCham, 美國商會) in Taipei in which it complained about Taiwan's cumbersome regulations with regard to the capital markets.

  Amcham takes road trip

  AmCham officials, headed by President Peter Banko, are scheduled to leave on a door-knock to Washington beginning next week when they will meet with top US officials and congressmen. They met with President Chen Shui-bian (陳水扁) and top economic officials on Wednesday.

  "It is a good public relations campaign," said Neal Stovicek, head of research at National Securities Corp (建弘證券). "This will make the financial markets here more investable and enlarge the pool of foreign money which can come to Taiwan."

  The government said on Thursday that the onerous requirement of investors to rank among the world's top 1,000 institutions in terms of fund size would also be removed. Vice Minister of Finance Lin Tzong-yong (林宗勇) said the easing in foreign investor requirements might be introduced next week.

  Spencer White, head of Merrill Lynch Securities and a member of AmCham's capital markets committee, said on Thursday that the long application process governing the qualified foreign institutional investors, or often known as QFIIs, may hinder the inflow of foreign money into Taiwan.

  Role for chamber

  White went so far as to suggest that AmCham may consider forming a "mechanism" to ensure the speedy approval of these applications.

  "The international fund managers putting their money in Taiwan want to have absolute simplicity," McGowan said. "These are fund managers and not administrators ? and they have very little patience."

  Observers, however, say that while the government's application procedures have become simpler and quicker, though it could still take up between three weeks to a month for an application from the eligible investors to be approved.

  The central bank (央行), which modulates capital flows, continues to remain highly sensitive about the exchange rate and the local money supply.

  The central bank, which usually has more of a say in these matters, has hitherto remained relatively tightlipped on the issue. Central Bank Governor Perng Fai-nan (彭淮南) is currently attending the Asian Development Bank's annual conference in Honolulu, Hawaii.

  But the finance ministry said the latest move could bring in as much US$20 billion into the Taiwanese financial markets in the first half of the next year. Yen also said it will reduce the required assets managed under fund management firms from US$1 billion to US$200 million.

  Net foreign buying by foreign institutional investors in local equities totaled NT$130 billion in the first four months of the year. The ministry said it may also go on a road show to promote Taiwanese stocks to international investors in such major centers as London, Paris, Frankfurt, New York and Tokyo.
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