The Taiwan authorities approved on Thursday five measures to enhance cross-straits securities investments, including one that will open Taiwan’s market to listings of Hong Kong’s exchange-traded funds (ETF) and allow Taiwanese ETFs to list in Hong Kong, the Caijing Magazine reported on Friday.
The measures signify the Taiwan authorities’ effort to loosen restrictions on investments in Hong Kong and the Chinese mainland.
The authorities scrapped the requirement that ‘foreign’ institutional investors in the local securities and futures markets must offer a written statement for proof their funds are not sourced from the Chinese mainland.
It will now allow local securities investment trust firms to invest in China’s mainland or purchase shares of mainland’s investment funds management companies as well as allow local futures firms to invest in their mainland counterparts directly or indirectly.
Companies listed in Hong Kong, except those that are 20 percent mainland-owned or based in China’s mainland, will be able to list shares in Taiwan or issue Taiwan Depository Receipts (TDR) under the new rules.
Taiwan’s Financial Supervisory Commission (FSC) Vice Chairwoman Susan Chang said that Taiwan authorities would loosen their current control over cross-straits financial investment. According to Chang, Taiwan security companies need to own at least 25 percent of total shares when they invest in the Chinese mainland in the future.
However, there are still problems existing in actual implementation of these measures.
"The Chinese mainland upper limit for sole ‘foreign’ capital is 20 percent in a joint-venture securities company while the Taiwan authorities require at least 25 percent,” a Taiwan-based trader told the magazine.
He added that he expects further improvement of Taiwan’s regulations in everyday operations.
For more details, please read the full story in Chinese
(China.org.cn by Yan Pei, June 27, 2008)