In the News

Premier OKs cross-strait financial regulations

• Publication Date：03/12/2010
• Source： Economic Daily News

Premier Wu Den-yih approved March 11 regulations relating to the operation of banks, insurance firms and securities companies on the two sides of the Taiwan Strait.

The regulations will not be made public until after the Financial Supervisory Commission makes a report on their contents to the Legislature, but sources said that they will loosen current restrictions.

Once the regulations are announced, Taiwanese banks can apply to upgrade the status of their representative offices in mainland China to branches, or to invest in mainland banks. Taiwanese securities firms will also be able to invest in their mainland counterparts.

Mainland Chinese banks, insurance and securities firms will be allowed to establish representative offices on the island, and to acquire a stake in their peers. After being in operation in Taiwan for more than two years, representative offices of mainland Chinese banks will be able to apply for branch status.

Detailed rules will depend on the outcome of the economic cooperative framework agreement currently being negotiated between Taipei and Beijing.

As for the actual number of local financial firms that will be allowed to invest in the mainland, unnamed FSC officials said that all firms that meet financial and business prerequisites will have their applications approved. However, the FSC does not know and therefore cannot comment on whether mainland authorities will approve the applications of Taiwanese financial companies.

With regards to inbound investments by mainland financials, the number of approvals also hinges on ECFA negotiations, sources said.

Separately, the Ministry of Economic Affairs said it will increase allowable investment targets by mainland entities based on the just-approved financial regulations. But the number of mainland firms that will be allowed in depends on further cross-strait negotiations. (HML-HZW)