OBU clients can invest in Taiwan with foreign currency
Taiwan News, Staff Writer
2014-04-11 10:50 AM
In order to guide capital into the Taiwan market, the Financial Supervisory Commission (FSC) announced approval for offshore banking units (OBU) to sell domestic securities investment trust issued multicurrency funds. In other words, OBU clients can use foreign currencies such as the U.S. dollar and Renminbi to invest in domestic multicurrency funds including NTD funds. In addition the funds themselves can invest in Taiwan.

FSC Banking Bureau Deputy Director-General Chang Kuo-ming stated that in the past, OBUs could only sell “offshore funds” to offshore clients. In addition, the investment targets of offshore funds “could not include NTD denominated commodities.”

However, to broaden domestic investment trust fund sales channels and guide investment funds into the Taiwan market, Chang stated that the FSC decided to allow OBUs to sell multicurrency funds issued by domestic investment trusts, including NTD funds, after negotiation with the Central Bank. However, the proportion of investment in the Taiwan Stock Market by this type of fund cannot exceed 30% of the OBU’s net asset value.

In order to develop Taiwan into an international bond market and forge Taiwan into an offshore RMB center, Chang indicated that if a fund’s investment target is a foreign currency denominated international bond such as a Formosa bond, the 30% net asset value limit can be disregarded.

Securities and Futures Bureau statistics show that 1014 offshore funds are currently approved totaling NT$2.9 trillion and domestic funds investing internationally number 317 totaling NT$542.4 billion.

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