Taiwan Stocks Exchange

With a market cap of $861 billion, the Taiwan Stocks Exchange was established in 1961 and commenced operations in 1962. Some of the securities listed on the exchange include: stocks, convertible bonds, government bonds, exchange-traded funds, entitlement certificates for convertible bonds, put warrants, call warrants and Taiwan Depository Receipts. The trading system of the exchange has been fully computerized since 1993. By collaborating with the Financial Supervisory Commission of Taiwan, the Taiwan Stocks Exchange monitors listed companies, makes daily reports to investors regarding unusual activities, investigates unusual circumstances and verifies the financial disclosure of listed companies. One of the main goals of the exchange is to develop new financial products that improve Taiwan`s capital markets and the country`s international competitiveness. At the Taiwan Stocks Exchange, one of the principles of engaging in securities borrowing and lending provides that foreign investors can use offshore collateral to negotiate for securities. Securities lenders at the exchange are mainly qualified financial institutions such as banks, insurance companies and future merchants. Borrowers at the exchange can either be securities investment firms, financial institutions and securities dealers. Essentially, Taiwan has benefited a lot from the deregulation of its stocks market. When it comes to securities lending, less state regulation is the only way to improve stocks loans and securities lending market. The Taiwan Stocks Exchange in 2003 launched a system called Securities Borrowing and Lending (SBL). The system was meant to ensure that only qualified institutional investors can transact as well as qualified securities finance companies can conduct SBL business.