1.FSC Eases Restrictions on Futures Proprietary merchants Engaging in Market Making Transactions in Overseas Futures
To encourage futures proprietary merchants to develop overseas business and to bring Taiwan’s futures market more closely in step with markets worldwide, the Financial Supervisory Commission (FSC) issued an order on 15 March 2017 easing restrictions on futures proprietary merchants engaging in market making transactions in overseas futures, and enabling the proprietary merchants to engage in such business without being confined to the scope announced under Article 5 of the Futures Trading Act. When engaging in such business, futures proprietary merchants merely need to make an ex post facto filing for recordation with the competent authority. Additionally, to enable futures proprietary merchants to consolidate their risk exposure in overseas futures trading more efficiently and to reduce administrative cost, the FSC order also eliminates the original requirement that a separate account be opened exclusively for market making trades. Futures proprietary merchants now may proceed in whatever way is allowed under the rules of the overseas exchange concerning market making accounts.
2.FSC Announces that Investment by Offshore Overseas Investors in Private Placement Convertible Corporate Bonds No Longer Counted Toward Limit of 30% of Inward Remittance
To assist TWSE and TPEx listed companies and emerging stock companies to tap overseas strategic investors by means of private placements, the FSC issued Order No. Financial-Supervisory- Securities-Firms-1060007307 on 13 March 2017. Under the order, investment by offshore overseas Chinese and foreign investors in private placement convertible corporate bonds is no longer counted among the types of investments that collectively may not exceed the limit of 30% of the inward remittance of funds by the investor.
3.Amendment to Provisions Regarding Borrowing and Lending of Securities by Offshore Foreign Institutional Investors
In keeping with its policy to expand the scope of traders eligible to participate in the Taiwan Stock Exchange’s securities borrowing and lending (SBL) system, to promote greater consistency and liquidity in the securities borrowing and lending market, the FSC issued Order No. Financial-Supervisory-Securities-Firms- 1060004899 on 15 March 2017. Whereas formerly only specific types of offshore foreign institutional investors were permitted to borrow and lend securities through the SBL system, the order now permits offshore foreign institutional investors of all types to borrow securities through the SBL system.