萬國法律事務所

The Financial Supervisory Commission gave notice of several liberalization measures that are meant to encourage enterprises to raise funds in Taiwan and to allow foreigners to issue bonds denominated in foreign currencies. The important points of these measures are below:

1. Foreign securities issuers are now permitted to raise funds by issuing corporate bonds denominated in foreign currencies in Taiwan.
2. Securities brokers can now buy and sell corporate bonds denominated in foreign and domestic currencies.

3. Foreign nationals and overseas Chinese may invest in corporate bonds denominated in foreign and domestic currencies.

4. Securities brokers can use their own funds to invest in securities, and the credit rating requirements of securities in which securities brokers may invest are liberalized.

5. Foreign issuers can use the shelf registration system to register for the offering and issuance of common corporate bonds. This replaces the past case-by-case registration system and enables foreign issuers to issue bonds on their own within the approved amounts and time periods.

6. When foreigners offer and issue common corporate bonds denominated in foreign currencies, the credit rating of which conforms to conditions established by the Financial Supervisory Commission, law other than the law of the Republic of China may be used as legal basis for the contract and court jurisdiction of litigation may be designated as well.

7. If foreign issuers compile their financial reports in accordance with American or international accounting rules, a CPA in the ROC need only provide an explanation of the differences in applicable accounting principles. This liberalization simplifies the submission of documents while meeting the needs of international securities issuance.

8. The minimum unit face value of international bond trades transacted in the place of business of securities brokers is lowered from 100,000 US dollars or euros, or 10 million Japanese yen, to 10,000 US dollars or euros, or 1 million Japanese yen.

The Financial Supervisory Commission noted that these liberalization measures will allow enterprises that issue bonds in Taiwan to enjoy low interest rates and issuing fees, and convenient procedures. Investors will be able to buy and sell bonds at nearby securities firms with whom they may already have business dealings.  Also, the reduction in minimum trade value will make trading easier for them. Furthermore, the relaxation of credit rating requirements for bonds issued by brokers will help brokers more eager to issue bonds.

It has been shown that the monthly average value of transactions conducted on Taiwan’s bond market is as high as NT$2 trillion.  In Asia, this is second only to Japan. The cost of bond issuance in Taiwan is lower than in Japan and only 50% to 60% of the cost in Singapore, making the island strongly competitive in this field. Numerous enterprises, including Deutsche Bank, have expressed an interest in issuing bonds in Taiwan.