The central bank yesterday said that it will lift restrictions to allow securities brokerages to conduct more foreign-exchange transactions to help the industry as it continues to struggle with low turnover on the local bourse.
The change would allow brokerages to conduct spot transactions denominated in New Taiwan dollars and sell foreign-exchange derivative products, the central bank said.
The change represents a significant shift in the central bank’s conservative position on foreign-exchange instruments denominated in NT dollars and are expected to be implemented by the second half of this year, the central bank said.
In 2013, the central bank allowed brokerages to conduct spot exchange transactions between foreign currencies, but the easing did not include the NT dollar.
Under the limitation, local investors are required to acquire foreign currencies from a bank to purchase foreign equities.
Following the change, qualified brokerages could move into territories that were previously only available to banks and bring more streamlined access to foreign equities and currencies.
However, the central bank said that initially, qualified brokerages will be required to enlist a foreign-exchange designated bank to oversee spot covering before they are allowed to operate independently.
Required regulatory filings and customer information verifications remain unchanged, the central bank added.
Meanwhile, average daily turnover last year declined 16.9 percent to NT$68.73 billion (US$2.14 billion) annually and at a faster pace than the 12.1 percent drop recorded in 2015, data from the Taiwan Stock Exchange showed.
As the market cools, Yuanta Securities Co (元大證券), the nation’s largest brokerage by market share, reported that net income for last year fell 24 percent annually, from NT$9.83 billion to NT$7.47 billion.
KGI Securities (凱基證券), the second-biggest brokerage, reported that aggregate net income in the first 11 months of last year registered a 22 percent annual drop to NT$5.77 billion, from NT$7.401 billion in 2015.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in