Taipei,Sept.5,2012--In line with the establishment of cross-Taiwan Strait currency clearance mechanism,listed companies will be allowed to float renminbi-denominated international bonds in Taiwan,giving them an extra channel for fund raising and bringing underwriting business opportunities to banks and securities firms,according to the"cross-Taiwan Strait feature finance"program publicized by the Financial Supervisory Commission(FSC)yesterday(Sept.4).
The FSC program contains"one theme,four aspects,five cores,and 10 highlights"and is expected to be approved by the Executive Yuan(the Cabinet)soon before execution by the FSC in two years.
According to the program,this year the FSC will open up domestic and offshore issuance of renminbi-denominated bonds.In late July,the FSC already announced permission for offshore issuance of renminbi-denominated bonds by listed firms.Yuen Foong Yu Paper has planned to float renminbi-denominated bonds at offshore banking units.Domestic issuance renminbi-denominated bonds will be opened up after the cross-Strait currency clearance mechanism hits the road.
Moreover,the government will open up issuance of renminbi-denominated international bonds,dubbed"Taiwanese version of dim sum bonds"or"sweet potato bonds,"at the domestic front,which will be even more attractive to investors than renminbi bonds issued at OBUs.
Other liberalization measures related to fund raising by enterprises,such as share listing of Taiwanese-invested enterprises with registration in mainland China at domestic bourse,will be opened up by the end of next year.
An official in charge expressed that renminbi-related businesses involve very wide range of scope.Simple businesses,such as renminbi deposits and loans,can be opened up along with the establishment of currency-clearance mechanism,while other businesses,such as derivatives,may need time for preparation.