Opening up stock market to foreign investors to include initial public offerings


October 26, 2010

On September 30, 2010 the Financial Supervisory Commission (FSC) agreed to allow foreign investors to invest in the initial public offerings of issuers that have either their primary listings or secondary listings in Taiwan’s securities market, which may include but is not limited to securities issued in the form of Taiwan Depositary Receipts (TDRs).  Prior to this new measure, foreign investors can only invest in securities issued by listed companies in Taiwan including privately placed securities and convertible bonds (CBs) entitlement certificates and TDRs including subsequent offering of securities as a result of a company’s capital increases and/or reissued TDRs.  On the other hand, Mainland Chinese investors (also called in Mainland China’s terminology, Qualified Domestic Institutional Investors or QDIIs) have traditionally faced more restrictions in Taiwan’s stock market than other foreign investors, which have been largely limited to equity securities of listed companies; however, it has been placed under consideration to further liberalize the scope of securities for the QDIIs to include participation in the initial public offerings.