Taiwan will launch offshore products linked with China’s stock market
Taiwan’s Financial Supervisory Commission (FSC) plans to allow the sale of offshore structured products linked to China’s securities and stock indexes on the island as early in late July and no later than the end of this year, our sister paper Taipei’s Want Daily reports, citing FSC chairperson William Tseng.
The FSC also plans to launch dual-currency credit cards and dual-currency Exchange Traded Funds (ETF) by the end of this year, Tseng said.
Currently, the FSC is negotiating with the central bank over the Taiwan Securities Association’s recent suggestions on opening five offshore securities unit (OSU) businesses, including opening an OSU to sell 100% Taiwanese stock funds, structured products, and derivative products linked with Taiwanese stocks or Taiwanese stock indexes, Tseng said.
The FSC on Thursday reported to the Executive Yuan on the progress made by the financial industry in incorporating itself into the free economic demonstration zone, with the central bank governor Perng Fai-nan and finance minister Chang Sheng-ford both praising the FSC move. Both Perng and Chang believe the policy relaxation by the FSC will help boost the financial industry, and both agencies will cooperate with the FSC to open up the financial sector.
In the first six months of this year, the combined pretax profits of domestic banks reached NT$179.4 billion (US$6 billion), up 27.14% from the same period last year, said Tseng, who projected the figures could exceed NT$300 billion (US$10 billion) this year, setting a new record for five straight years. For the first half of the year, offshore banking units (OBUs) reported pretax profits of NT$46.1 billion (US$1.5 billion), up 53.67% from the same period a year earlier. This is related to the relaxation in the free economic demonstration zone, allowing the financial industry to make jobs for 20,070 people.
All kinds of new financial products will be launched by the end of this year, including the sale of offshore structured products linked to China’s securities, stock indexes, stock index futures, bonds, money market-related interest rate indicators, as well as renminbi indicators by domestic banking units, according to the FSC.
The FSC has also negotiated with the central bank about the opening up of dual-currency ETFs, which the central bank said it was happy to see go ahead. The FSC will first unveil the legal structure for this, and once it obtains the quota for the Renminbi Qualified Foreign Institutional Investor (RQFII), the dual-currency ETF will go listed in the local market.
