FSC eases rules on Chinese investment in foreign firms listed here

2018/06/11 16:57:47 fontsize-small fontsize-default fontsize-big
FSC eases rules on Chinese investment in foreign firms listed here

Taipei, June 11 (CNA) The Financial Supervisory Commission (FSC), Taiwan's top financial regulator, has relaxed rules on Chinese investment in foreign incorporated firms listed on Taiwan's stock exchange or over-the-counter (OTC) market.

The FSC will now allow foreign companies that have launched a primary listing in Taiwan to sell shares to any Chinese investor, including qualified domestic institutional investors (QDIIs), through a private placement, a rights issue, an acquisition or a stake transfer.

Previously, shares of foreign firms listed on Taiwan's stock markets could only be traded by Chinese investors on the open market and only by Chinese QDIIs.

Under the new rules, a foreign company listed in Taiwan will have to file an application with the Taiwan Stock Exchange or the Taipei Exchange to set up a strategic partnership with Chinese investors through these new fund raising channels, the FSC said.

But Chinese investors will not have to obtain QDII status to use the alternative fund-raising channels, the FSC said.

The new rules are expected to help foreign companies take advantage of more fund-raising sources and allow them manage their shares in a more flexible manner, ultimately making a primary listing in Taiwan more attractive to them, the FSC said.

One rule that will remain unchanged, however, is that Chinese investors will not be allowed to own more than a combined 30 percent stake in a foreign company listed in Taiwan, ensuring that Chinese investors cannot take a controlling stake in such companies, the FSC said.

Taiwan has allowed foreign companies to launch their primary listing on the Taiwan stock exchange or OTC market since 2008.

As of the end of April, a total of 104 foreign companies had launched primary listings in Taiwan, including 70 on the main exchange, according to the FSC.

The FSC said 70 to 80 percent of the 104 foreign companies are headquartered in China or use China as their major base of operations.

(By Tsai Yi-chu and Frances Huang)
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