After outlining its ambition to transform Taiwan's capital market into an "Asian Nasdaq," the Taiwan Stock Exchange Corp (TWSE) yesterday announced it would ease rules governing listed companies in an effort to attract more foreign start-ups.
With President William Lai (賴清德) and Premier Cho Jung-tai (卓榮泰) having vowed to build Taiwan into an Asia NASDAQ and the Financial Supervisory Commission (FSC) committed to making the country into a major fundraising platform, the exchange will relax its rules, with an initial focus on startups from Southeast Asia and the US Silicon Valley, TWSE president Edith Lee (李愛玲) told reporters.
The combined market value of the local main board and the over-the-counter (OTC) market hit NT$90 trillion (US$2.93 trillion) at the end of last month, the eighth largest in the world, with the semiconductor industry accounting for 48 percent of total market capitalization, Lee said.
Photo: CNA
The FSC has a vision to leverage Taiwan's technology advantage to boost the local capital market's global competitive edge, she added.
Among the rules to be eased by the TWSE, listed foreign companies where the major shareholder controls a more than 30 percent stake, but involves no capital provided by China, Hong Kong or Macau, will be exempted from the requirement to establish a board of directors on which Taiwan nationals account for more than half, the exchange said.
However, such companies will be required to appoint at least two Taiwan nationals as independent board members, it added.
Meanwhile, mutual funds will be allowed to use the same requirements to buy stocks listed on the Taiwan Innovative Board (TIB) as when currently buying stocks listed on the main board in terms of investment amounts, while investors are allowed to buy and sell multi-asset exchange-traded funds (ETF) that track stocks listed on the TIB, the exchange said.
The TIB accommodates stocks, which have a limited capital size or still incur losses but have a promising future, to raise funds for growth, according to the TWSE. An ETF refers to investment funds that trade like shares and can track anything from a single stock to a broad market index.
Whenever a company that meets profit requirements set by the main board but chooses to seek a listing on the TIB, the rules governing the period for share depository and clearing will be shortened from two years to one year, while rules governing underwriting and accounting reviews will also be eased, the exchange said.
Companies listed on the main board, the OTC market, or the TIB will be allowed to migrate to other boards after a minimum of one year as long as they meet the listing requirements of the board they seek, it added.
The TWSE did not disclose when the new rules will come into effect.
In addition to the rule relaxation, the TWSE and the Taipei Exchange, which runs the OTC market, will integrate resources to help companies in the industries designated by the government to launch a stock listing.
Companies are eligible to receive assistance if they operate in the fields of semiconductors, artificial intelligence (AI), AI of Things (AIoT), green energy and environmental protection, robotics, cloud services, smart transportation, smart healthcare, biotech, cybersecurity, next-generation communications, drone, and national defense and aviation, the TWSE said.
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