The 153rd Council Meeting of the Mainland Affairs Council (MAC) today (29th) passed the draft amendment to “Regulations Governing the Approval of Securities and Futures Transactions Between the Taiwan Area and the Mainland China Area” prepared by the Financial Supervisory Commission under the Executive Yuan, which regulates that Taiwanese securities firms shall be allowed to set up subsidiaries in the Mainland China area. The aforementioned draft amendment clearly stipulates the qualifications, the maximum amount of capital to be invested, the minimum share holding proportion, and the application documents required to be submitted by Taiwanese securities firms to set up subsidiaries in the Mainland China area, as well as the review procedures and the risk control mechanism. This relaxation measure and the draft amendment shall be submitted to the Executive Yuan for approval.
The Memorandum of Understanding (MOU) for Cross-Strait Supervision and Cooperation that needs to be signed to enable securities firms to proceed to the Mainland China area to set up subsidiaries is a unilateral restriction imposed by China; Taiwan has not made this requirement. Based on experiences drawn from the supervision procedures of other countries whose securities firms have branches set up overseas, the MOUs signed with the host governments were not the necessary requirements for supervision. Therefore, after consultations with the agencies concerned, before both sides of the Strait could sign an MOU, the Commission will take suitable methods and establish a risk management mechanism in supervising the setting up of subsidiaries by Taiwanese securities firms in China. The Commission has at the same time amended the “Regulations Governing the Application of Securities and Futures Transactions Between the Taiwan Area and the Mainland China Area” and the related legal procedures, which will be submitted to the Executive Yuan for approval before implementation.