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Updated Monday, March 22, 2010 5:15 pm TWN, By Lin Ye-fong, Cheng Yun-hsuan and Fanny Liu, CNA

Financial institutions' China applications could take weeks

TAIPEI, Taiwan -- Applications by domestic financial institutions to gain greater access to China's market will not be accepted for at least two or three weeks, the Legislative Yuan's finance committee said Monday.

Lo Ming-tsai, convener of the legislative finance committee, said that the Financial Supervisory Commission (FSC) needed to submit a proposal for review by the Legislative Yuan before local financial institutions submit their applications to the commission.

Lo said that the proposal had to be passed by the Legislative Yuan's procedure committee first and then sent to the finance committee for review. "It will be another two to three weeks at the earliest," he said.

It was previously expected that the FSC would accept applications by domestic financial institutions Monday at the earliest -- after the FSC attends the legislative finance committee's meeting the same day.

Bank of Taiwan Chairwoman Susan Chang said that the process would be less controversial if all lawmaking procedures are done according to rules.

"We have been waiting for seven to eight years, so it will not make much difference if we need to wait for another couple weeks or a month," Chang said.

Meanwhile, FSC Chairman Sean Chen said that the "early harvest" program for the financial industry under the proposed economic cooperation framework agreement (ECFA) will be announced at the end of April.

Chen said the FSC would seek the best deal under the trade pact with China -- such as allowing local banks to do business using the Chinese yuan.

According to regulations promulgated by the FSC March 16 with immediate effect, Taiwanese banks, insurance companies and securities firms can have a presence in China using two of three options: setting up representative offices, opening branches or subsidiaries, or holding a stake in a Chinese bank or firm.

If their applications to set up operations are approved by the FSC, domestic banks and financial holding companies will also be required to file applications with Chinese authorities, which will notify the FSC if the applications are approved, FSC officials said.

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