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China bank ad hurts parity principle: FSC

TAIPEI -- A print advertisement congratulating a Chinese bank on its launch of Formosa bonds has violated the principle of parity across the Taiwan Strait, the Financial Supervisory Commission (FSC) confirmed Wednesday.

The country's top financial regulatory body was referring to an ad on the front page of the Dec. 9 edition of the United Daily News and its sister newspaper, the Economic Daily News, on China Construction Bank's launch of Chinese yuan-denominated bonds in Taiwan.

The full-page Chinese-language ad, placed by a number of Taiwan-based companies, including several Taiwanese banks fully or partially owned by the government, congratulated the Beijing-based bank for its successful launch of the biggest ever tranche of yuan-denominated Formosa bonds “inside the island.”

In the Chinese terminology and from the perspective of cross-Taiwan Strait politics, “inside the island” implies that Taiwan is part of China.

The FSC said it has inquired among Taiwanese banks and securities companies about their knowledge of the content of the controversial ad.

“Most of them said they were not informed of the ad prior to its publication, while others said that although they were informed of the ad, they were unaware of its content,” the FSC said in a statement.

Acting on its instructions, the FSC said, the GreTai Securities Market has issued letters to relevant local banks asking them to exercise caution and abide by government regulations when dealing with Formosa bond-related ads in the future.

GreTai management has also sent a warning to China Construction Bank's Taipei branch about its breach of the principle of cross-strait parity and urging it to abide by relevant regulations and avoid any repeat of similar misconduct when placing ads, the FSC added.

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