Taiwan Depository & Clearing Corporation

Taiwan Depository & Clearing Corporation (TDCC), Euroclear Bank (Euroclear) and Citibank hold a ceremony to launch the new cross-border service for the international bond market on Thursday, April 3, which was witnessed by Commissioner Lin of the Financial Supervisory Commission (FSC) and Deputy Governor Yang of the Central Bank. The service will allow investors to be able to directly access the local Formosa bond market through Euroclear’s account in the future.

According to Commissioner Lin of FSC, foreign investors have long been played an important role in the local securities market. In order to expend Taiwan’s capital market and enhance the market internationalization, in February this year the Executive Yuan lifted restrictions previously imposed on foreign investment in foreign currency-denominated bonds issued within Taiwan, while also removing many of the procedures required to be followed by a foreign investor. This deregulation was done so that the local bond market can become an attractive investment location for foreign investors through their ICSDs, and eventually bring new capital flows into the local capital market. Now, an effort by TDCC has led to the link with Euroclear, through which it will be more convenient for these foreign investors to invest in the international bonds market.”

Deputy Governor Yang of the Central Bank said: ”The Central Bank has actively planed to establish foreign currency clearing platform since 2012 and successfully completed the clearing and settlement services for domestic and cross-strait USD and RMB remittances as well as PVP mechanism for USD/NTD payment settlements. The next stage is planned to provide DVP mechanism for foreign currency-denominated securities. After the foreign currency clearing platform links with TDCC’s system and Euroclear’s services, it will expand international services in clearing platform for foreign currency.”

Ms. Lieve Mostrey, Executive Director of the Board said:” Euroclear is the world’s largest service provider for the access of the global offshore RMB market for foreign investors and the total amount of offshore RMB bond under custody accounts for 40% of all issuances. With the ever-growing importance of RMB as an international currency, it is the significant moment for Euroclear to participate the development of the Taiwan Formosa bond market. We are delighted to be working with TDCC and Citi on this ground-breaking project and look forward to helping Taiwan to bring in foreign investment.”

According to Chairman Ding of TDCC, as a back-office mechanism for the capital market, TDCC has the responsibility to install a more secure and efficient infrastructure. In recent years TDCC actively promoted the internationalization of various businesses, including the introduction of international bonds business in 2006, the provision of the cross-border settlement service for ETF in 2009, the expended the Fund Order-Routing Service to the offshore funds in 2012, the linkage with the Hong Kong Monetary Authority's CMU at the end of 2012 to provide the cross-border settlement for the international bonds between Taiwan and Hong Kong, and planning for establishment of straight through process (STP) for cross-border e-voting of shareholders’ meeting in the near future to facilitate foreign investors to invest in Taiwan.

Chairman Ding stressed that we are particularly grateful to the guidance and assistance of the authorities, the Central Bank and the Ministry of Finance for the success of this project. We will continuously enhance our cross-border clearing and settlement services to improve operation efficiency and reduce costs for market participants and also strengthen the competitiveness of Taiwan’s market.