Securities regulators from Taiwan and mainland China concluded a set of measures governing reciprocal investment Jan. 29 as part of efforts promoting cross-strait financial exchanges.
“These measures help boost development of cross-strait financial markets and stand as a major achievement in bilateral exchanges,” said Huang Tien-mu, director-general of the ROC Financial Supervisory Commission’s Securities and Futures Bureau.
Huang made the remarks at a news conference following the first meeting of the cross-strait financial supervisory platform for securities and futures in Taipei City.
Hosted by FSC Chairman Chen Yuh-chang and his mainland Chinese counterpart Guo Shuqing, chairman of Beijing-based Securities Regulatory Commission, Huang said the meeting serves as an institutionalized platform for policy negotiations over market access and discussions of related financial supervisory regulations.
The meeting took place under the auspices of the cross-strait financial cooperation agreement and memorandum of understanding on financial supervision signed in 2009.
According to Huang, the FSC will raise the investment ceiling for mainland Chinese qualified domestic institutional investors in Taiwan’s stock market from US$500 million to US$1 billion.
The FSC also plans to relax qualification requirements for mainland Chinese securities and futures companies wishing to set up representative offices in Taiwan, and study the feasibility of allowing them to lift stakes in their Taiwan counterparts, Huang said. The possibility of permitting qualified domestic individual investors to enter Taiwan’s capital market will similarly be considered, he added.
“Both sides have agreed to work on allowing fully compliant mainland China-registered Taiwan firms to go public on the island,” Huang said. “A detailed agenda including establishing an effective supervisory mechanism and protecting the interests of stakeholders will be discussed later this year.”
According to the FSC, Taiwan brokerages are to be permitted to set up venture securities investment and consultation firms in mainland China, with the highest ownership stake capped at 49 percent. This can be raised to over 50 percent in pilot financial reform zones.
In addition, Taiwan futures agents can set up futures brokerages in mainland China with ownership stakes capped at 49 percent; and Taiwan securities institutions are cleared to take 50 percent-plus positions in mainland Chinese fund managers, the FSC said.
Taiwan firms may also gain qualified foreign institutional investor status, which gives them a mandate to invest up to 100 billion yuan (US$15.88 billion) in mainland Chinese stock exchanges closed to non-qualified foreign investors, the FSC added. (JSM)
Write to Rachel Chan at ccchan@mofa.gov.tw