Newsletter
FUTURES EXCHANGE URGES MOF TO ADOPT POINTS FOR ATTENTION BY INSURANCE COMPANIES HANDLING DERIVATIVES BUSINESS
The Securities and Futures Commission (SFC) recently convened the members of the Ad Hoc Committee for Futures Market Development to discuss its futures market development plan. The committee resolved to consult with the bankers association and insurance association, and to hold a related symposium as soon as possible. It has also decided to report to the concerned authorities-in-charge on their plans for such matters as risk management, directors' meeting resolutions, and restrictions on trading.
In most major countries today, banks and insurers are allowed to engage in futures and options trading. In Taiwan, however, only foreign investors and securities dealers are permitted to trade in Taiwan Stock Exchange index futures. The Insurance Law has no provisions allowing insurers to engage in derivatives transactions, nor has the Ministry of Finance adopted any relevant regulation that would permit insurers to engage in futures trading.
To solve the hedging needs of banks and insurers and achieve a stable stock market and a flexible futures market, the SFC has urged the Ministry of Finance (MOF) to adopt a case-by-case approval system, and to formulate Points for Attention by Insurance Companies Handling Derivatives Business.