The Financial Supervisory Commission (FSC) is considering easing regulations on local securities dealers, by allowing them to purchase foreign bonds or financial derivatives from their overseas units, after the Taiwan Securities Association urged the commission to ease the Regulations Governing Securities Firms (證券商管理規則).
The association argued that local securities brokerages, which can only buy foreign financial products from other foreign investment companies, should be allowed to purchase the products directly from their overseas subsidiaries, as local banks and life insurers are allowed to conduct such trades.
The commission agreed to ease the rules, as it would help brokerages reduce costs and handling fees, while giving them more flexibility in their operations, Securities and Futures Bureau Deputy Director Sam Chang (張振山) said last week.
However, the commission would limit each local securities firm’s transaction with its foreign units to 10 percent of its net value, while the cumulative amount of a transaction would not be allowed to exceed 20 percent of its net value, Chang said.
For instance, Yuanta Securities Co (元大證券), the nation’s largest brokerage, would be allowed to buy or sell up to NT$9.84 billion (US$323 million) in bonds and derivatives with Yuanta Securities Hong Kong Co Ltd (元大證券香港) in a single trade, given that the Taipei-based firm’s net value is NT$98.43 billion, Chang said.
The planned rule change would benefit 13 local brokerages, which have foreign units in locations ranging from Hong Kong, South Korea, Thailand and Vietnam to Malaysia and Indonesia, Chang said.
Yuanta is ranked first in terms of net value, followed by KGI Securities Co (凱基證券) with net value of NT$65.9 billion, Fubon Securities Co (富邦證券) with NT$36.9 billion, Capital Securities Corp (群益金鼎證券) with NT$34.7 billion and SinoPac Securities Corp (永豐金證券) with NT$27 billion, commission data showed.
Other brokerages set to benefit from the rule change are Jih Sun Securities Co (日盛證券), President Securities Corp (統一證券), MasterLink Securities Co (元富證券), Hua Nan Securities Co (華南永昌證券), IBF Securities Co (國票證券), Cathay Securities Corp (國泰證券), CTBC Securities Co (中國信託證券) and First Securities Inc (第一金證券).