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Eased regulations a boon for financial sector: Citicorp

TAIPEI, Taiwan -- Taiwan's top financial regulator's announcement that it would ease restrictions on 26 financial businesses will largely help diversify Taiwan's financial product market in 2014, according to Citicorp.

Taiwan's Financial Supervisory Commission (FSC) last week announced the relaxation of 26 financial businesses, including renminbi (RMB)-denominated life insurance policies, RMB-denominated structural products and non-investment grade bonds.

Citicorp Securities Investment Consulting Vice President Spencer Wang (王進彰) told The China Post that the ease of restrictions announced last week will speed up the development of Taiwan's financial product market.

FSC Chairperson Tseng Ming-chung (曾銘宗) attended a meeting in late 2013 with 28 chief executives of securities firms, where he stated that the FSC would definitely lift the ban on issuing RMB-denominated traditional life insurance policies. According to the Insurance Bureau of the FSC, the interest rate on RMB-denominated traditional policies would be between 2.25-2.5 percent per annum, nearly the same as the interest rate on U.S.-dollar life insurance policies.

Wang added that the removal of restrictions on the qualification of non-residents for derivative products at offshore banking units (OBUs), as well as simplified application procedures for OBUs, will help get money from Taiwanese businesses overseas back home.

A currencies investment portfolio which include Taiwan dollars, U.S. dollars and RMB, said Wang, will generate stable interest revenue.

Wang suggested that investors increase holding positions of advance economies, including the U.S., EU and Japan, as growth in these economies increased from 1.1 percent in 2013 to about 2 percent in 2014.

He indicated that securities investors could allocate 60 percent of their portfolio to stock and 40 percent to bonds.

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