The Cabinet yesterday approved five measures to enhance cross-strait securities exchanges, which officials said would promote the internationalization of the local stock market and encourage more medium and long-term foreign capital inflow.
“It’s difficult to estimate an exact figure for potential influx of foreign capital, but to establish a laissez-faire and open market would surely attract more foreign participation,” Financial Supervisory Commission (FSC) Vice Chairwoman Susan Chang (張秀蓮) told a press conference.
The proposal was drafted by the FSC in consultation with the Council of Economic Planning and Development, the Mainland Affairs Council and the Central Bank of the Republic of China (Taiwan).
A policy goal is to indirectly open the local stock market to Chinese capital. Current regulation do not allow Chinese investors to purchase Taiwanese stocks.
To meet the goal, the government will abolish a regulation on foreign institutional investor (FII) funds that requires the presentation of written statements to prove that the capital that would be put into local securities and futures markets would not be from China when registering with the Taiwan Stock Exchange Corp (TSEC).
China started to allow its Qualified Domestic Institutional Investors (QDII) to invest in offshore funds last June, so keeping the regulation on FII funds in the country would only impede them from the local stock market, Chang said.
A measure to open mutual listings of Exchanged Traded Funds (ETF) on the Taiwan and Hong Kong stock markets is also expected to meet Cabinet goals, as Chinese would then be able to indirectly invest in Taiwan’s local stock market via their transactions in Hong Kong’s stock market.
Taiwan-issued ETFs will be able to go public on the Hong Kong stock market when the FSC reaches an agreement on the exchange of information and examination with Hong Kong’s Security and Futures Bureau, under a side letter based on the bilateral Memorandum of Understanding of 1996, Chang said.
Chang said the FSC would also allow Hong Kong-issued ETFs to list on the local stock market based on the principle of equality and reciprocity.
The government is also aiming at attracting Taiwanese capital back to the country by allowing companies listed on the Hong Kong Stock Exchange to realize their second listings on Taiwan’s stock market or issue Taiwan Depository Receipts (TDR).
The move would make Hong Kong exchanges the 18th overseas stock market with which companies listed for more than six months can have second listings in Taiwan's stock market.
But companies that have registered in China, foreign companies whose main shareholders are Chinese, and 20 percent of shares of companies that are directly or indirectly owned by Chinese will be excluded from the measure for the moment, Chang said.
“The exceptions are just a temporary remedy, as the ministry is now deliberating whether to remove the ban on Chinese investment in Taiwan,” Chang said.
Another measure was to cancel rules that allow offshore funds to invest a certain ratio in Chinese shares as well as Hong Kong/Macau H and red chip shares.
Previously, offshore funds and overseas funds raised by securities investment trust enterprise and discretionary investment businesses could invest up to 0.4 percent of their net assets in Chinese shares and up to 10 percent of their net assets in Hong Kong/Macau H and red chip shares.
Private funds of securities investment trust firms are not allowed to purchase shares in the Chinese stock market and red-chip and H shares in Hong Kong and Macau stock market, while future trust funds and discretionary future trading businesses are also banned from future transactions in China.
Chang said the government would loosen all the regulations, but added that the percentage by which the government would raise the ratio has yet to be determined.
“Twenty-four funds have been forced to close for failing to conform to the ratios. Given the tendency of holding more red-chip shares, it’s necessary to revise the regulations,” Chang said.
The government also said it would allow local securities investment trust firms to invest in China or purchase shares of China’s investment funds management companies and allow local futures firms to invest in China’s counterparts directly or indirectly.
Also See: Central bank to continue fiscal tightening: analysts
The US government has signed defense cooperation agreements with Japan and the Philippines to boost the deterrence capabilities of countries in the first island chain, a report by the National Security Bureau (NSB) showed. The main countries on the first island chain include the two nations and Taiwan. The bureau is to present the report at a meeting of the legislature’s Foreign Affairs and National Defense Committee tomorrow. The US military has deployed Typhon missile systems to Japan’s Yamaguchi Prefecture and Zambales province in the Philippines during their joint military exercises. It has also installed NMESIS anti-ship systems in Japan’s Okinawa
‘WIN-WIN’: The Philippines, and central and eastern European countries are important potential drone cooperation partners, Minister of Foreign Affairs Lin Chia-lung said Minister of Foreign Affairs Lin Chia-lung (林佳龍) in an interview published yesterday confirmed that there are joint ventures between Taiwan and Poland in the drone industry. Lin made the remark in an exclusive interview with the Chinese-language Liberty Times (the Taipei Times’ sister paper). The government-backed Taiwan Excellence Drone International Business Opportunities Alliance and the Polish Chamber of Unmanned Systems on Wednesday last week signed a memorandum of understanding in Poland to develop a “non-China” supply chain for drones and work together on key technologies. Asked if Taiwan prioritized Poland among central and eastern European countries in drone collaboration, Lin
The Chien Feng IV (勁蜂, Mighty Hornet) loitering munition is on track to enter flight tests next month in connection with potential adoption by Taiwanese and US armed forces, a government source said yesterday. The kamikaze drone, which boasts a range of 1,000km, debuted at the Taipei Aerospace and Defense Technology Exhibition in September, the official said on condition of anonymity. The Chungshan Institute of Science and Technology and US-based Kratos Defense jointly developed the platform by leveraging the engine and airframe of the latter’s MQM-178 Firejet target drone, they said. The uncrewed aerial vehicle is designed to utilize an artificial intelligence computer
Renewed border fighting between Thailand and Cambodia showed no signs of abating yesterday, leaving hundreds of thousands of displaced people in both countries living in strained conditions as more flooded into temporary shelters. Reporters on the Thai side of the border heard sounds of outgoing, indirect fire yesterday. About 400,000 people have been evacuated from affected areas in Thailand and about 700 schools closed while fighting was ongoing in four border provinces, said Thai Rear Admiral Surasant Kongsiri, a spokesman for the military. Cambodia evacuated more than 127,000 villagers and closed hundreds of schools, the Thai Ministry of Defense said. Thailand’s military announced that
RSS