Taiwan Depository & Clearing Corporation

TDCC held a press conference on January 9, 2017, for a recap on 2016 operations. At the press conference, Chairman& CEO Sherman Lin noted that TDCC delivered resilient growth in all business units, with significant improvement in terms of both the service quality and quantity, thanks to unreserved support from the competent authorities and the hard work of all TDCC employees. This year, TDCC will continue to improve the infrastructures for the digitization of the financial industry with the same commitment to innovation and openness.

Chairman& CEO Sherman Lin highlighted the six major programs that TDCC worked on in 2016, including “Infrastructure Build-out for Digitized Book-entry,”“Expansion of Cross-border Depository Business,”“Promotion of E-voting Service,”“Optimization of Fund Investment Platform,” “Establishment of the Anti-money Laundering Query System”and“Support for Philanthropy and Financial Education.”Apart from the six programs, TDCC also introduced several innovative initiatives using the latest financial technology (Fintech) in order to help clients expand their market presence and improve the operating efficiency of Taiwan’s capital market.

Regarding infrastructure build-out for digitized book-entry, TDCC launched a new service that allows investors to update their book-entry online. A straight through processing (STP) platform that connects with the servers of securities brokerages was also put in place, with which securities firms may apply for automatic transmission of transaction data, reducing the operating cost and risks.

In terms of cross-border depository, given the government’s policy to achieve alignment with the global financial markets, TDCC has endeavored to promote the new depository service since it was launched in August 2015. To date, more than 30 institutional investors have opened accounts at TDCC, including Yuanta Securities and Mega Bill, which respectively capture the highest share in the securities and bill markets. Many have moved their overseas securities back to Taiwan to be put under TDCC’s custody. Notably, the number of TDCC’s customers for cross-border depository rose 400% YoY, while the value of securities under custody jumped 160% YoY to NT$600bn in 2016, which was truly a remarkable achievement.

As for e-voting promotion, last year TDCC rolled out a new value-added function that connects Stockvote, the e-voting app TDCC developed, with the order placement apps of securities companies, allowing shareholders to participate in voting via mobile devices. In 2016, the weighting of e-voting in AGM participation averaged 45%, with 104 companies recording e-voting ratios of over 60%. A total of 980k e-ballots were casted last year, of which 900k were held by general shareholders, up 320% YoY. In that year, Stockvote processed 360k e-ballots, or 40% of general shareholders’votes. The prevalence of e-voting gives more shareholders the opportunity to voice their opinions, ultimately improving the quality of corporate governance in Taiwan. As such, Taiwan jumped to the fourth place in a ranking of corporate governance across Asia.

In terms of the optimization of fund investment platform, TDCC has completed a variety of market infrastructures since 2006. Last year, TDCC established a dedicated Fund & Global Services department in order to put resources to better use and consequently to improve the service quality. Specifically, TDCC unveiled a local fund payment processing mechanism, along with the“One-card Access”payment authorization option and direct remittance of redemption proceeds and dividends in foreign currency. This year, TDCC also introduced a payment facilitation service, which allows investors to receive their redemption proceeds and dividends earlier. All these services are rolled out with an aim to enhance TDCC's operating efficiency in fund investment payment and to provide investors as well as other market participants with a more convenient and user-friendly environment for investment. Fund Rich Securities, a joint venture of TDCC and several fund companies, also came on stream in 4Q16 as a brand-new online distribution channel of mutual funds. In the future, Fund Rich Securities will continue to contribute to the development of the fund industry by launching more efficient and user-friendly services while maintaining transaction safety.

The prevention of money laundering has been a highly valued task worldwide. Under the supervision of competent authorities, TDCC established an anti-money laundering query system and had served, as of the end of 2016, a total of 949 companies (including their branches), with more than 405k queries. The establishment of a money laundering blacklist and the query system is an excellent example of how TDCC can put resources to good use and serve the capital market. TDCC customers are given access to this value-added service, which helps them ensure compliance to anti-money laundering laws and regulations at lower costs.

In addition to the back office operations, TDCC has also taken its corporate social responsibility, as requested by the Financial Supervisory Commission, by sponsoring or hosting a variety of charity events. In 2016, TDCC continued its cooperation with the Securities & Futures Institute, Taiwan Fund for Children and Families and several colleges and universities in organizing the “Financial Literacy for Youth” boot camp, which provided basic courses to financially-challenged college students in order to help them find employment in the financial industry in the future. TDCC also sponsored several programs, including an athlete grant scheme, charity care for remote primary schools and scholarship for financially-needed college students, as a part of the efforts to fulfill its corporate social responsibility and to build a better society.

For the promotion of financial education, the Taiwan Stock Museum, since its opening in 2012, has received more than 82k visits. The Taiwan Securities and Futures Virtual Museum also came online in January 2016, and has to date registered over 100k online visits. In the future, the two museums will continue to play an important role in promoting financial education.

TDCC Chairman& CEO Sherman Lin specified three major objectives for the company in 2017: (1) launching the mobile passbook and an integrated digital service platform for the build-out of infrastructures for digital finance 3.0; (2) facilitating the issuance of dematerialized commercial paper to enhance transaction efficiency; and (3) helping Fund Rich Securities develop capacities for smart customer service and Big Data analysis, using the latest Fintech, in order to provide investors with more diversified fund subscription choices. The chairman asked the competent authorities, TDCC affiliates and stakeholders to continue to offer their support in the coming year, and noted that TDCC will stand by its role as a trustworthy depository and continue to invest in the research and development of Fintech to bring innovation and convenience to the capital market in Taiwan.

Photo description: Chairman& CEO Sherman Lin addressing the media on TDCC’s recent achievements and future outlook.