Cross-strait market cooperation should proceed slowly: FSC
Tseng Ming-chung, chairman of Taiwan’s Financial Supervisory Commission (FSC), said Wednesday that cooperation in the capital markets across the Taiwan Strait should be implemented in a gradual manner.
Tseng made the comments after the local media cited Jiang Yang, vice chairman of the China Securities Regulatory Commission (CSRC), as reporting that the CSRC is studying the feasibility of a Taipei-Shanghai stock trading mechanism, modeled on the “Shanghai-Hong Kong Stock Connect” launched last year.
The Shanghai-Hong Kong Stock Connect trading platform allows foreign investors to trade Chinese A-shares in Hong Kong, and investors in Shanghai to trade Hong Kong shares in China.
Companies listed on China’s exchanges offer two classes of shares: A shares denominated in Chinese yuan for Chinese investors to trade and B shares denominated in U.S. dollars or Hong Kong dollars for foreign investors to trade.
Tseng said that internationalization has become an irreversible trend in the development of Taiwan’s capital market and the FSC is determined to boost its global visibility.
However, a Taipei-Shanghai trading mechanism is a complicated issue which will require involvement by many institutions to make it happen, while Taiwan itself should reach a consensus on whether or how to implement it, Tseng said.
Tseng said that Taiwan needs more time to assess such a cross-border stock trading platform but he said that the two stock exchanges in Taipei and Shanghai could start with less complicated exchanges, such as cross-licensing stock indexes and market information sharing as the first stage of cooperation.
He said he believes that using a step-bystep approach to pursue cross strait capital market cooperation will strengthen mutual understanding between each side and pave the path for further exchanges in the future.
According to local media reports, Jiang said in a cross-strait economic forum held in Taipei that the CSRC supports any cooperation between the stock exchanges in Taipei and Shanghai.
Jiang admitted in the report that whether a Taipei-Shanghai stock exchange will be implemented is up to the will of authorities in Taiwan to open the door to such market exchanges.