The Financial Supervisory Commission (FSC) is considering easing requirements on secondary public offerings, disclosing more pre-market trading information and allowing the establishment of Web-only securities companies in a bid to boost the nation’s capital market, the commission said yesterday.
The commission would consider easing regulations for publicly traded biotech companies that raised capital through private placements, allowing investors to sell their shares in the open market even though the firms have not turned a profit, it said.
Under current rules, investors in private placements cannot sell the companies’ shares within three years following the delivery of the securities and cannot sell the shares in the open market if the companies remain in the red, the commission said.
However, many biotech companies have complained that it is difficult to raise funds through private placements, as it is not easy to make a profit due to time-consuming research and development, Securities and Futures Bureau Deputy Director Sam Chang (張振山) told a news conference in New Taipei City.
“Due to the characteristics of the biotech industry, we might consider exempting them from the conditions regarding companies’ profits,” Chang said.
“For example, their investors might be allowed to sell shares in the open market after six years even though the companies remain in the red,” he said.
However, as investors in private placements, who usually buy the shares at a discount, enjoy some advantages that regular investors do not have, the commission would ensure that the deregulation would not lead to unfair transactions, it said.
The commission would ask the Taiwan Stock Exchange and Taipei Exchange to boost transparency by disclosing more information about the disposition of securities and monitor potential suspicious trading activities, Chang said.
The commission would also study if it is time to encourage the development of Web-only securities companies, as more people get accustomed to placing orders online, with the ratio of online orders rising to 70 percent, he added.
“Some securities companies tried to offer Internet-only services in the past, but failed, as consumers preferred consulting agents face-to-face. However, as digital transactions get more popular among consumers, companies might want to try again,” an official said.
The regulator would announce by the end of the year a detailed three-year roadmap to boost the capital market, including easing listing rules, FSC Chairman Thomas Huang (黃天牧) told the news conference.
Some of the deregulatory measures are likely to take effect at the end of this year or in the first quarter of next year at the earliest, Huang said.
The regulatory revisions should help the nation’s direct financing activities and attract more foreign investors, he said.
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