The Financial Supervisory Commission, the competent authority in the central government level regulating securities market, banking and insurance sectors, has in the past year initiated several regulation liberalisations on the restrictions placed on foreign companies for them to be publicly listed in the securities markets (Taiwan Stock Exchange and Gre Tai Securities Market) and reinvest in mainland China, allowing companies having the stocks listed in Hong Kong and Korea stock exchange markets to be listed on the Taiwan securities markets, simplifying the listing rules for foreign companies and allowing foreign technology companies to be listed as the first listing in Taiwan. The results of these liberalisations as of May 25 2009 include two foreign companies having their stocks listed through Taiwan Depository Receipts and two foreign companies having their stocks registered as the Gre Tai Securities Market.
Financial activities in Taiwan have experienced a slowdown. As a high proportion of the country's gross domestic product (GDP) consists of exports, the economy suffered from the sharp contraction of global trade caused by the financial crisis....
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Financial activities in Taiwan have experienced a slowdown. As a high proportion of the country's gross domestic product (GDP) consists of exports, the economy suffered from the sharp contraction of global trade caused by the financial crisis. There have been a number of transactions that relate to distressed or insolvent companies, banks and financial institutions this year, and practitioners also note a decline in foreign private equity investments in Taiwanese companies. For example, the banking sector saw the sale of Asia Trust and Investment Corporation (Asia Trust) by Central Deposit Insurance Corporation (CDIC) to Standard Chartered Bank. HSBC also acquired a distressed bank from CDIC in a subsequent transaction.
As a result of the convergence with international financial reporting standards (IFRS) Taiwan adopted in May 2009, European insurance companies have been selling their local assets and business. Evidence of this could be seen from the sale of ING Group's life insurance business to Fubon Financial Holding and China Life's acquisition of Prudential Life Insurance Company's Taiwan unit.
Cross-strait investments have been on the rise since President Ma Ying-jeou took office last year. Of note was the move to open up Taiwan's stock and futures markets to mainland Chinese this April, including qualified domestic institutional investors (QDII) in mainland China. The relaxed control of securities markets was also followed by measures of Taiwan's Financial Supervisory Commission in June 2009, allowing local securities trust firms to invest in mainland China and purchase shares of Chinese investment funds' management companies. Local futures firms are now able to invest in their mainland counterparts as well.
Taiwan's securities markets have also been opened to Hong Kong-listed companies to issue Taiwan depository receipts (TDR), and Taiwanese exchange-traded funds (ETF) are able to list shares in Hong Kong. But practitioners expect that it takes time to see a notable rise in such deals.
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