Taiwan’s Financial Supervisory Commission (FSC) said on Jan. 7 that the nation is planning to allow Chinese nationals to open accounts with the offshore securities units (OSU) of Taiwanese brokerage firms while traveling in Taiwan and buy shares on the nation’s stock exchange.
“When they (Chinese) visit Taiwan, they will be able to not only buy local pineapple cakes but also buy local shares by opening accounts in Taiwan,” said William Tseng (曾銘宗), chairman for FSC.
Tseng made his remarks during a press conference. He said that Taiwan does not need to “negotiate” with China for the issue. Also, he said, Taiwanese nationals are able to open accounts to buy shares when traveling overseas without any restriction.
Taiwan opened its stock market to Chinese qualified domestic institutional investors in 2010, and the new mechanism will allow individuals, retail, and big investors to invest in Taiwan’s stocks as well. Tseng said, however, the new proposal will not be carried out immediately, now that it takes time for the government to work out eligibility requirements.
“Opening accounts in Taiwan through financial services’ institution offshore units will have to be convenient for the plan to succeed, and the government must also figure out how to cooperate with travel agencies in preventing money laundering,” Tseng said. “We need time to draw up complementary measures.”
The chairman said that Taiwan’s government cannot continue to ban foreign investors, including the Chinese, while Taiwanese are allowed to buy shares overseas.
“Liberalization is a trend,” Tseng said.
Meanwhile, Tseng also mentioned that it is harder for financial institutions to expand their business in China and allow Chinese nationals to buy shares in Taiwan, while the cross-strait service trade pact continues to stall at the legislature.
“Anyway, I would expect to see Chinese investors buy shares in Taiwan by the end of June or in the third quarter,” he said.