The Financial Supervisory Commission announced on Thursday that domestic financial insitutions’ offshore banking units (OBU) may buy funds denominated in the local currency to help expand local fund houses’ sales channels.
OBUs used to be restricted to buying foreign currency-based funds for their foreign clients.
The latest deregulation could help boost the business of local fund houses and advance the government’s goal of turning Taiwan into an offshore yuan hub in the region, the commission said in a statement.
Whether onshore or offshore, funds with OBU investment may buy local shares but they should not exceed 30 percent of their net worth, the commission said.
However, this restriction does not apply to bonds denominated in foreign currencies, including the yuan, as the commission is actively promoting Formosa bonds.
Separately, the commission on Thursday approved plans by state-owned Bank of Taiwan (台灣銀行), the main subsidiary of Taiwan Financial Holding Co (台灣金控), to open a representative office in Yangon, Myanmar.
Taiwan is encouraging local banks to expand in ASEAN countries, where an increasing number of Taiwanese businesspeople are moving to take advantage of these fast-growing economies.
Thus far, First Commercial Bank (第一銀行), E.Sun Commercial Bank (玉山銀行), Cathay United Bank (國泰世華銀行), Mega International Commercial Bank (兆豐國際商銀) and CTBC Bank (中信銀行) have won the commission’s approval to enter the Burmese market, following the government’s implementation of social and economic reforms.
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