Newsletter
FSC PLANS TO ALLOW FOR-EIGN INVESTORS TO CONDUCT NON-HEDGING FUTURES TRANSACTIONS
The Financial Supervisory Commission (FSC) noticed a recent increase in foreign investment on Taiwan's securities market. However, given that foreign investors may only trade futures on Taiwan's futures market for hedging purpose against the positions currently held or anticipated to be held by foreign investors, foreign investors are less active in Taiwan's futures market. In order to change the status quo, the FSC is con-sidering to allow foreign investors to engage non-hedging in futures transactions. The FSC further plans to introduce multi-purpose ac-counts and USD denominated futures instru-ments, hoping that this would facilitate the in-ternationalization of Taiwan's futures market.
The Securities and Futures Bureau (SFB) has thus drafted the Regulations Governing Futures Transactions by Overseas Chinese and Foreign-ers. These draft Regulations have been pub-lished for public comments. They cover the following items:
The definition of "overseas Chinese and for-eigners" and the scope of futures transactions.
The requirement for foreign investors to en-gage a tax agent to declare and pay taxes.
The qualifications of the agent for foreign in-vestors.
The use of the funds remitted into Taiwan, the conversion of the funds into New Taiwan Dollars, and the limitation on the amount of New Taiwan Dollars held by foreign investors and the purposes.
The appointment of a custodian institution by foreign investors for closing purposes and filing necessary reports.
The procedures for opening accounts and the qualifications for opening a multi-purpose account.
The restrictions on the positions held and the relevant reporting obligations.
For the same purpose, the SFB also plans to amend the Regulations Governing Futures Commission Merchants and the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals. The amend-ments have also been published to solicit public comments.