SLB Service in Taiwan Securities Market Taiwan Depository & Clearing Co. ACG New Service Initiative Task Force.

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Presentation transcript:

SLB Service in Taiwan Securities Market Taiwan Depository & Clearing Co. ACG New Service Initiative Task Force

History & Development Stocks SLB  Sep for “settlement”  Taiwan Stock Exchange initiated the SLB system for completing settlement  TDCC has processed book-entry for SLB transactions  Jun for “strategic trading”  SLB system was opened for institutional investors’ arbitrage, hedging or exercise related transaction  June for “trading and exercising”  “Strategic trading purposes” requirement was abolished  The total market volume limit was adopted  more eligible securities were added to SLB system

History & Development (Continue) Bonds SLB (Jan. 2004)  GreTai Securities Market (GTSM) initiated bonds SLB system  Only Federal bonds were eligible  Matching, risk management, guarantee and settlements provide by GTSM  TDCC is not engaged in any services for bonds SLB

Statistic of Stocks Lending & Borrowing

Factors stagnated the growth of SLB’s turnover volume  Less ECB issued  Less volatility of market price  Insurance companies suspend securities lending  No short selling under the closing price of previous trading day  Tax Concern

NEXT STEPS  Solve the settlement’s problem on the sales of lent securities  Abolish price limit of indicated short sales  Allow foreign private funds to participate in SLB market  Allow to loan the borrowed securities  Assist to solve problems with the tax authority  Simplify the pledge procedure

Thanks

Types of SLB Transactions  Settlement Purpose SLB For a securities firm or a securities financing enterprise to complete settlements  Trading and Exercise Purpose SLB 1. Fixed-rate transactions 2. Competitive-auction transactions 3. Negotiated transactions

Participation -Trading & Exercise Purpose SLB  Permitted Lenders 1. Insurance companies 2. Financial institutions 3. Securities investment trust companies 4. Dedicated futures commission merchants, and 5. Others approved by the competent authority (Such as foreign institutional investors (FINIs) and 4 governmental funds)  Permitted Borrowers 1. Securities dealers 2. Securities investment trust companies 3. Futures dealers, and 4. Others approved by the competent authority (FINIs)