Taiwan OKs more investment for financial firms in China

By Sheena Lee

TAIPEI, June 26 (Reuters) - Taiwan's cabinet on Thursday approved a raft of reforms allowing greater investment by its financial firms in China, further opening the fast-growing mainland market to its brokerages, asset managers and others.

The moves were hammered out by regulators but still required official approval from the month-old cabinet of new President Ma Ying-jeou, who won his post in a landslide this year partly on the promise of closer economic ties with China.

"In the future, we will look to loosen other regulations," said Susan Chang, vice chairwoman of the Financial Supervisory Commission (FSC), the top financial regulator.

Under the new policies, domestic brokerages would be allowed to put up to 20 percent of their net assets into Chinese counterparts, double the previous limit, Chang said, adding the cabinet expected to finalise new rules involving brokerages within a month.

Asset management and futures trading companies will also be allowed to invest in their China peers, ending a previous ban.

Chang said foreigners who wished to invest in Taiwan would no longer have to prove their funds were not from China.

In another change, the cabinet will let Hong Kong-listed companies co-list in Taiwan if they are not registered in China, if less than 20 percent of their stock is held by Chinese stakeholders and if their major shareholders are not Chinese, Chang said.

The moves are expected to help financial services companies across the spectrum, such as industry leaders Cathay Financial (2882.TW), Shin Kong Financial (2888.TW), Taishin Financial 2887 and Fubon Financial (2881.TW).