1.Foreign Issuers Allowed to Issue Foreign Currency Denominated Sukuk Sold Only to Professional Investors in Taiwan
To increase the diversity of international bond products and issuers in Taiwan, and to boost the development of Taiwan bond market, the Financial Supervisory Commission (FSC) issued an interpretive order on 14 June 2019 allowing foreign issuers to issue foreign currency denominated Sukuk, which can only be sold to professional investors in Taiwan, and shall comply with applicable rules stipulated by Taipei Exchange (TPEx).
2.Partial Amendment to the Regulations Governing Futures Clearing Houses Intended to Expand the Scope of Business Undertaken by Futures Clearing Houses to Include Central Clearing of OTC Derivatives and to Strengthen Market Risk Management Mechanisms for Futures Clearing Houses
To align with the amendment to the Futures Trading Act announced on 16 January 2019, in which a legal basis for compulsory central clearing of over-the-counter (OTC) derivatives was added to Article 3, and Article 49 was amended with respect to the provision of financial security safeguards mechanism to deal with defaults by futures clearing members, and also with reference to regulatory practices for the compensation reserve funds remitted by futures clearing houses, the FSC amended and issued the above-mentioned Regulations on 24 June 2019. The amendments stipulated that the business scope of futures clearing houses shall include central clearing of OTC derivatives, and that futures clearing houses shall determine and implement the order of financial security safeguards mechanism in which the various sources of reserve funds are drawn upon to compensate for an default event in the futures market. Furthermore, the FSC stipulated that each futures clearing house shall contribute NT$500 million compensation reserve fund for the first time and the aggregate appropriation amount of the compensation reserve fund shall be up to 1.5 times the authorized capital amount or the allocated operating capital amount. The compensation reserve funds shall be allocated and deposited separately for futures trading on the exchange and OTC markets, and shall be deposited in different dedicated accounts. These measures will help promote the development of OTC derivatives central clearing in Taiwan and will enhance the risk management mechanism in Taiwan''s futures market.