FSC Signs MoU with the European Securities and Markets Authority Related to Recognized Central Counterparties and supervises TAIFEX applying for QCCP recognition of foreign competent authorities
2022-11-08
In order to promote foreign financial institutions to participate in Taiwan's central clearing business, the Taiwan Futures Exchange (TAIFEX) makes great efforts to apply for QCCP recognition under the regulations of foreign countries. The Financial Supervisory Commission, Taiwan (FSC) has entered into a Memorandum of Understanding (MoU) with the European Securities and Markets Authority (ESMA) to establish cooperation arrangements regarding the Central Counterparty (CCP) in Taiwan, TAIFEX, which has applied for ESMA recognition under the European Markets Infrastructure Regulation (EMIR). Additionally, in 2022 the U.S. Commodity Futures Trading Commission (CFTC) issues No-Action Letter to the TAIFEX, and the TAIFEX can be recognized as the QCCP by Australian financial institutions.
The signing of the MoU follows the European Commission’s equivalence decision on September 28th, 2022, recognizing that Taiwan’s legal and supervisory framework for CCPs has been deemed equivalent to EMIR, and the execution of the MoU satisfies a condition of the ESMA recognition process and serves to facilitate the recognition of the Taiwan Futures Exchange. The recognition is critical and beneficial for European Union (EU) financial institutions to manage the counterparty risk efficiently with lower capital requirements that increase their willingness and market confidence to participate in the Taiwan financial market.
Through the MoU, the FSC and the ESMA express a desire for enhanced cooperation with the CCPs operating in the EU. The MoU reflects FSC’s and ESMA’s commitment to strengthening their mutual cooperative relationship and building upon a supervisory collaboration between Taiwan and EU competent authorities. This MoU is a major milestone allowing for fruitful cooperation related to the CCPs between the FSC and the ESMA and lays foundation of mutual trust between Taiwan and Europe’s competent authorities.
In September 2022 the CFTC issued a No-Action Letter to the TAIFEX that allows U.S. financial institutions to enjoy capital charge concessions from September 2022 to September 2023. Moreover, according to the regulations of the Australian Prudential Regulation Authority (APRA), the TAIFEX can be recognized as a QCCP by Australian financial institutions now that the TAIFEX has been recognized as a qualified CCP by the FSC in 2022. The above recognition will definitely encourage foreign financial institutions to participate in the Taiwan financial market, and effectively raises Taiwan’s market visibility.
Contact: Mr. Lin Chia-Chang, Section Chief, Securities and Futures Bureau
Contact tel: +886 2 2774 7115
The signing of the MoU follows the European Commission’s equivalence decision on September 28th, 2022, recognizing that Taiwan’s legal and supervisory framework for CCPs has been deemed equivalent to EMIR, and the execution of the MoU satisfies a condition of the ESMA recognition process and serves to facilitate the recognition of the Taiwan Futures Exchange. The recognition is critical and beneficial for European Union (EU) financial institutions to manage the counterparty risk efficiently with lower capital requirements that increase their willingness and market confidence to participate in the Taiwan financial market.
Through the MoU, the FSC and the ESMA express a desire for enhanced cooperation with the CCPs operating in the EU. The MoU reflects FSC’s and ESMA’s commitment to strengthening their mutual cooperative relationship and building upon a supervisory collaboration between Taiwan and EU competent authorities. This MoU is a major milestone allowing for fruitful cooperation related to the CCPs between the FSC and the ESMA and lays foundation of mutual trust between Taiwan and Europe’s competent authorities.
In September 2022 the CFTC issued a No-Action Letter to the TAIFEX that allows U.S. financial institutions to enjoy capital charge concessions from September 2022 to September 2023. Moreover, according to the regulations of the Australian Prudential Regulation Authority (APRA), the TAIFEX can be recognized as a QCCP by Australian financial institutions now that the TAIFEX has been recognized as a qualified CCP by the FSC in 2022. The above recognition will definitely encourage foreign financial institutions to participate in the Taiwan financial market, and effectively raises Taiwan’s market visibility.
Contact: Mr. Lin Chia-Chang, Section Chief, Securities and Futures Bureau
Contact tel: +886 2 2774 7115
Visitor：
1490
Update：
2022-11-09