萬國法律事務所

In order to facilitate the borrowing and lending of shares for strategic trading purposes as required by specific foreign institutional investors (FINIs), and to assist in the development of a reliable Securities Borrowing and Lending (SBL) System, the Financial Supervisory Commission recently amended the relevant regulations so as to permit specific FINIs (including foreign fund managers, securities houses, banks and insurance companies, scholastic and charity organizations, trust companies, unit trusts, investment trusts, mutual funds, pension funds, as well as the investment agencies of foreign governments) to participate as borrowers and lenders in connection with the following:

1. the creation of ETFs

2. to hedge or arbitrage either a) onshore- or offshore-issued convertible bonds, b) onshore- or offshore-issued exchangeable bond, or c) exchangeable government bonds;

3. to convert exchangeable bonds or convertible bonds into shares; and

4. to redeem original borrowed shares.