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Updated Saturday, November 21, 2009 2:44 pm TWN, The China Post news staff and CNA



	Accompanied by Taiwan Semiconductor Mfg. Co. chairman Morris Chang, left, Vice Premier Eric Chu, right, officiates the launch of an online trading platform for international bond investment along with GTSM Chairman Chen Shuh and officials from the Financial Supervisory Commission. (CNA) Enlarge Photo

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GTSM launches online int'l bond trading

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.

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