QDII investment cap to be hiked to US$1 bil.
By Ted Chen, The China PostTAIPEI, Taiwan -- The investment limit for the Qualified Domestic Institutional Investor (QDII) scheme is poised to be doubled from to US$1 billion, stated Securities and Futures Bureau (SFB, 證期局) Director-General Huang Tien-mu (黃天牧) yesterday.
January 30, 2013, 12:07 am TWN
In a conference yesterday, regulatory departments and their counterparts from across the Strait made progress toward the formalization of terms and conditions for the QDII scheme, which stipulates investment of Chinese funds into Taiwanese markets.
In addition, the requirements for Chinese financial institutions to set up branches in Taiwan have been eased, said Huang.
Chinese financial institutions now only require two years of experience in providing international securities and futures knowledge, counting operations in Hong Kong and Macau. Previously, the SFB had set requirements at five years of international operations, excluding Hong Kong and Macau.
Huang also stated that plans are in place to expand the allowable ownership stake Chinese financial institutions may hold in Taiwanese securities and futures operators.
Taiwan has put forth a gesture of great amicability, and will greatly facilitate the process for Chinese financial institutions to set up branches here, said Tong Dao-chi (童道馳), director-general of the Department of International Affairs at the China Securities Regulatory Commission (CSRC, 大陸證監會國際部), while expressing gratitude.
The conference yesterday established a collaborative platform for financial institutions across the Strait, including clearing standards and channels of communication, while paving the way for further dialogue in the future, said Tong.
Current QDII Stipulations
Taiwanese financial institutions' ownership stake of Chinese brokerage companies many not exceed 49 percent, and may not apply for new operations beyond that of investment banks until after two years of operations.
Citing the rapid expansion of Shanghai's A Share Index (A股), and the willingness of Taiwanese institutional investors to participate, Tong said that Qualified Taiwanese companies may create up to one full-service brokerage branch in Shanghai, Fujian, and Shenzen, but Taiwanese shareholding must not exceed 51 percent, while Chinese shareholder status is not limited to Chinese financial institutions.
Tong also indicated that talks are in place to initiate a pilot program for Taiwanese companies to establish a full-service brokerage branch within an experimental financial free zone, with the stipulation that Taiwanese companies' shareholding will not exceed 49 percent.
For investment advisory and futures operations, Taiwanese shareholdings may not exceed 49 percent, but for operations within the forthcoming financial free zone, Taiwanese shareholdings may be expanded to 51 percent.
For fund management operations, under the stipulations of the Economic Cooperation Framework Agreement, Taiwanese shareholdings may exceed 50 percent, which is the key to proliferating trade across the Strait, according to Tong.