The Financial Supervisory Commission (FSC) plans to introduce new policies later this year to help companies list on the local stock market, Chairman Thomas Huang (黃天牧) said in an interview yesterday.
There have only been nine IPOs so far this year, lagging far behind the commission’s target of 52 for the whole year, as the COVID-19 pandemic has affected companies’ financial performance in the first half of the year and disrupted their listing plans, Huang said.
Under current rules, companies must be profitable to qualify for listing, while those with sizable net value and large revenue, or select biotech firms recommended by the government can apply to hold IPOs.
Photo: Kao Shih-ching, Taipei Times
In view of the pandemic, the commission is considering allowing the Taiwan Stock Exchange and Taipei Exchange to use companies’ earnings results in the third quarter when reviewing their IPO qualifications, Huang said.
“We are not lowering our standards. We want to help companies mitigate the effect of the pandemic and continue their fundraising plan,” Huang said, adding that the commission would announce the new measures next month.
The commission has not trimmed its target number for IPOs, although listing activity would inevitably slow due to the pandemic, he said.
It is on schedule to implement odd-lot intraday trading in October, allowing investors to buy shares in quantities of less than 1,000 during regular trading hours, he said.
More than 60 local brokerages have expressed a willingness to handle the new service, up from 10 last year, he added.
In June next year, the Taiwan Stock Exchange is to introduce a market-making system to improve liquidity for companies that are financially sound, but not popular among investors, he added.
As for the development of open banking in Taiwan, the commission would allow banks by the end of this year to cooperate with third-party service providers to share consumer data with other banks after gaining consumers’ consent, he said.
Overall, local financial firms would remain resilient and overcome challenges due to the pandemic and global rate cuts, he said.
“I think insurers should be able to adapt to changes in the business environment, although they are sensitive to market volatility,” he said.
As local banks have been supportive in providing loans to those affected by the pandemic, the commission has seldom received complaints from companies, he said.
However, banks’ profitability might weaken slightly as they provide relief loans, he added.
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