(On June 26, 2008, the Executive Yuan approved the
"Program on Adjusting Cross-Strait Securities Investment: Short-term Plan," with
related legal and regulatory amendments to be promulgated later; On July 3,
2008, the Executive Yuan approved a plan to "Review the Easing of Ratio
Restrictions on Mainland Stock-related Overseas Investments Made by Funds," with
related legal and regulatory amendments to be promulgated later)
On June 26, 2008, the government exempted fund-type foreign institutional
investors from declaring their funding sources. It also allowed Taiwan and Hong
Kong exchange-traded funds (ETFs) to be mutually listed on the other side’s stock
market, permitted enterprises listed on the Hong Kong Stock Exchange (HKEx) to apply
for secondary listings (including over-the-counter listings) in Taiwan, allowed
Taiwanese securities firms to invest in mainland China’s securities and futures
market, and eased restrictions to allow funds to make overseas investments in Mainland-related
shares.
On September 12, 2008, the investment ratio restrictions were eased
to allow the overseas funds, discretionary investment assets and offshore funds
collected by the securities investment trust industry to be invested in Mainland-listed
negotiable securities and H shares and red chip shares listed in Hong Kong and Macao.
The 10% ratio limit on investment in H shares and red chip shares listed in Hong
Kong and Macao was cancelled and the ratio limit on investment in Mainland-listed
negotiable securities was lifted to 10% from the current 0.4%. These measures are
aimed at providing more favorable conditions to help Taiwan’s financial institutions
to enter and expand in the Mainland, Hong Kong, and Macao markets.
Benefits: These measures will help Taiwan to globalize its capital
markets, attract mid-and long-term international capital to invest in Taiwan, give
business operators more flexibility to expand overseas business deployment and asset
management operations, meet the investment diversification needs of investors, and
transform Taiwan into an “Asia-Pacific Fund-Raising and Asset Management Center.”
Sources: