The inauguration ceremony was officiated by Vice Premier Eric Chu, GTSM Chairman Chen Shuh and officials from the Financial Supervisory Commission.

Chu said the online connection of the electronic trading system with the U.S. bond market marks a major step for the local bond market towards internationalization as local securities brokers will be able to trade U.S. bonds directly via the GTSM's system.

The GTSM established the strategic cooperation with ICAP, the world's largest electronic inter-dealer broker for U.S. Treasury securities, and JP Morgan, the largest clearing bank for the U.S. Federal Reserve System, to provide the trading platform — U.S. Treasuries Trading Platform.

The electronic trading platform can save at least half of the transaction fee and custodian fee for local traders to lower their trading costs of U.S. government debts, a GTSM official said. Five local brokerage houses joined yesterday the trading platform, which connects to ICAP's electronic trading platform BrokerTec and operates 22 hours a day, the official added.

“With the trading volume of Taiwanese bond markets having shrunk more than 50 percent so far this year, the U.S. Treasuries trading platform brought us a new commodity — also a new opportunity,” said Jeff Chen, vice president of the bond department at Capital Securities, which was among one of the first securities to log on the platform.

Nearly 60 percent of the U.S. government debts are traded via BrokerTec; and in the Asia time zone, BrokerTec accounts for more than 80 percent of fixed income market share, the GTSM said.

Chairman Chen of the GTSM said earlier that trading U.S. Treasury securities was just a first step, as the trading platform will also be used to trade euro bonds and Japanese bonds in the future.

According to the GTSM, many small- or medium-sized local brokerages, restrained by their size and credibility, have had difficulties getting U.S. government bonds via primary dealers which purchase a majority of the U.S. Treasury securities sold at auctions and resell them to the public.

Only a few local brokerages were able to get limited bonds from those primary dealers, which are mostly major global banks or securities brokers.But they need to pay higher trading and settlement costs, the GTSM said. Although the new trading platform enables most local brokerages to trade U.S. government debts with lower costs, some traders still voiced their concerns.

The policy limit of foreign currency risk exposure for local brokerages and the control of foreign fund flows made the trading not as smooth as expected, said a local trader, adding that most traders are still taking a wait-and-see attitude. In August, Taiwan's brokerages were allowed to extend their foreign bonds trading by the Cabinet-level FSC.

Foreign securities — including government bonds, financial bonds and corporate bonds — were no longer required to be listed on foreign securities exchanges to be eligible for trading by Taiwan's brokerages.

Meanwhile, the GTSM yesterday also hosted the 4th International Bond Market Conference to exchange views from officials and investment experts from several nations and areas, including the U.S., Canada, Hong Kong, Singapore, Thailand, and Ghana.

Topics on the agency included the development and investment opportunities for Asian bond and derivatives markets after the Asian financial crisis in the late 1990s and after the new global financial crisis started in mid-2008. This Conference is one of GTSM 15th anniversary celebration activities. The GTSM, a government-designated agency, was established to supervise the primary and secondary markets of both emerging stocks and fixed-income products in Taiwan.