Published On: Sun, Jul 8th, 2012

Taiwan FSC Announced Several Measures Regarding Cross Strait Business Ties and Securities Dealing

The Taiwan FSC has recently announced several liberalisation measures regarding cross strait business ties and securities dealing.

On 25 June 2012, the FSC said that plans to greatly open up cross-Taiwan Strait financial businesses following the establishment of a currency clearance mechanism, including allowance for local people to invest in mainland Chinese stocks via re-consignment with securities firms and opening up of the issuance of renminbi-denominated mutual funds, insurance policies, and structured notes. Presently, local people can buy mainland Chinese securities only via mutual funds. In the future, they can place orders with mainland Chinese securities firms via the mediation of local securities firms for the purchase of stocks and the subscription to mutual funds in mainland China.

On 27 June 2012,The Bank of China became the first mainland lender to open a branch in Taiwan. The Governor of the bank called the opening a “milestone in the deepening of economic and financial cooperation between Taiwan and the mainland.”

On 2 July 2012, the FSC said that it plans to allow local companies to issue renminbi-denominated bonds bonds in Hong Kong or through Taiwanese banks’ offshore banking units (OBUs) to finance their Chinese operations, making it easier for local firms to raise funds. The FSC also plans to open up foreign enterprises issuing renminbi-denominated bonds in Taiwan, known as Formosa Bonds, following the establishment of a cross-Strait currency clearance mechanism.

These pragrmatic developments would seem welcome on both sides of the Straits.

Source: Compliance Asia

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