1. The FSC’s concept for promoting cross-strait financial businesses
The financial services industry is covered under the Early Harvest list of the Cross-strait Economic Cooperation Framework Agreement (ECFA) signed in June 2010, which is very helpful to Taiwan's financial services firms in their efforts to establish a presence in the Mainland market.
The FSC, while taking precautions to ensure that our actions are in line with our government's overall policy on relations with Mainland China, will actively seek concessions that allow our financial service providers advantageous market access and afford them opportunities to expand the scope of their business activities in the mainland. In addition, we will also adjust restrictions on the access of Mainland financial firms to the Taiwan market, acting in accordance with the principles of parity and prudential supervision to ensure that these changes do not have an unacceptable impact upon the domestic market.
2. Executive Yuan adopts "Program for Development of Financial Businesses with Cross-strait Characteristics".
To coordinate with the development of cross-strait economic and trade relations, the FSC, the Central Bank, the Mainland Affairs Council, and the Ministry of Economic Affairs jointly adopted the "Program for Development of Financial Businesses with Cross-strait Characteristics," and the plan was approved by the Executive Yuan on 6 September 2012.
The overarching objectives of the Program are to help our financial services firms to fully tap into the unique opportunities afforded by their cross-strait presence, and work effectively with the economic and trade activities of Taiwan-invested enterprises in the Mainland to expand the competitive advantages enjoyed by Taiwan firms in cross-strait financial markets.
Key points covered by the Program include the following:
(1) complete lifting of restriction on the conduct of RMB banking business by domestic banking units (DBUs);
(2) a modernized cross-strait money flow platform;
(3) cross-strait e-commerce money flow services;
(4) use of credit cards on both sides of the Taiwan Strait;
(5) assistance for the efforts of financial institutions to set up business presences in the Mainland to serve Taiwan-invested enterprises operating there;
(6) allowing high-quality Taiwan-invested enterprises operating in the Mainland to list their stock on the Taiwan Stock Exchange or GreTai Securities Market;
(7) allowing public companies in Taiwan to issue RMB-denominated corporate bonds and other capital instruments;
(8) development of asset management and personal financial planning services for the greater China area;
(9) expansion of insurance-related businesses and services;
(10) eliminating obstacles and obtaining favorable conditions for access to Mainland markets through supervisory cooperation.
3. Financial services firms’ cross-strait presence
A total of 14 banks (First Commercial Bank, Cathay United Bank, Chang Hwa Bank, Land Bank of Taiwan, Taiwan Cooperative Bank, Hua Nan Commercial Bank, Mega International Commercial Bank, Bank of Taiwan, E.SUN Commercial Bank, CTBC Bank, Taiwan Business Bank, Bank SinoPac, Taipei Fubon Bank and Shanghai Commercial & Savings Bank) have received the FSC’s approval to set up branches or subsidiaries in Mainland China. In addition, 3 Mainland Chinese banks, the Bank of China, the Bank of Communications and China Construction Bank, have established branches in Taipei.
At the end of February 2019, all the banks (First Commercial Bank, Land Bank of Taiwan, Taiwan Cooperative Bank, Hua Nan Commercial Bank, Mega International Commercial Bank, Bank of Taiwan, CTBC Bank, and Taiwan Business Bank) with branches in Mainland China and Taipei Fubon Bank’s subsidiary in Mainland China are allowed to conduct comprehensive RMB business.
Securities Investment Trust Enterprises (SITEs):
Four SITEs (Fubon Securities Investment Trust Company, Yuanta Securities Investment Trust Company, Cathay Securities Investment Trust Company and SinoPac Securities Investment Trust Company) have been allowed by the FSC to take equity stakes in Mainland investment management companies. All these companies have received approval in the Mainland and are already in operation there. In addition, 8 Taiwanese securities companies have established 11 representative offices in the Mainland, and 1 securities investment trust company has opened a representative offices.
As of the end of February 2019, 20 domestic securities investment trust enterprises and 1 domestic securities company have received recognition as Qualified Foreign Institutional Investors (QFIIs) from the Mainland securities regulatory authority. Furthermore, 19 domestic securities investment trust enterprises and 1 domestic securities company have been approved by the Mainland foreign exchange regulatory authority to invest up to a maximum of US$5.60 billion and US$80 million respectively.
Seven Taiwan insurers (Cathay Life Insurance, Cathay Century Insurance, Shin Kong Life Insurance, Taiwan Life Insurance, China Life Insurance, Fubon Life Insurance, Fubon Insurance,) received approval to make strategic equity investments and have already completed investments in the Mainland. In addition, 12 domestic insurers have established 13 representative offices in the Mainland.
As of the end of January 2019, ten domestic insurers have applied with mainland authorities for recognition as QFIIs. Nine of them have been recognized as QFIIs by the mainland securities regulatory authority and have been approved by the mainland foreign exchange regulatory authority to invest up to a maximum of US$ 4.7 billion.