A new financial holding company must have minimum assets of NT$750 billion and working capital of NT$60 billion, the Financial Supervisory Commission (FSC) said in a statement.

Accoding to a report by the local Economic Daily News, of the 14 existing financial holding firms, seven do not meet the new standards. They are: Waterland Financial Holdings, Jih Sun Holdings, E.Sun Financial Holding Co., Shin Kong Financial Holding Co., Yuanta Financial Holding Co., China Development Financial Holding Corp., and Hua Nan Financial Holdings.

And in the case of Waterland, Jih Sun and E.Sun, they do not meet both the total asset and working capital minimums.

Taiwan’s existing financial holding firms were set up under the old rule, which set the total asset and working capital minimums at NT$300 billion and NT$20 billion, respectively.

The FSC has required firms that do not meet the new standards to remedy the situation either by increasing capital or engaging in “cooperative efforts” with each other, with industry insiders interpreting “cooperative efforts” as merger and acquisition deals, the Economic Daily News reported.

Stocks in Taiwan’s financial market, the No. 4 in Asia, have been trading at among the cheapest levels in the region, making them among of the best bargains for foreign investors.

The shares were hurt by an overcrowded banking sector, limited home market growth, restrictions on investing in China and a consumer credit crisis that sent Chinatrust, HSBC and many other banks into heavy losses last year.

Another requirements of the new regulations is that a financial holding firm must have any two units of banking, insurance and securities, the regulator said.

Taiwan’s Cabinet said on Aug. 15 it planned to set up its first state-owned financial holding firm at the end of 2007 that would be among the world’s top 100 lenders by assets.

The Cabinet aims for the company to have a larger than 10 percent share of the local market and rankings of No. 18 in Asia and No. 89 in the world.

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