The representatives of the Taiwan Depository & Clearing Corporation (TDCC) were invited by the Citigroup Global Markets Limited (CGML) to attend the “Citi Financial Market Infrastructures Focus Series: TDCC/Taiwan” on April 13. In the in-depth interviews, the TDCC representatives shared with foreign investor clients about the excellent performance of Taiwan’s capital market in recent years, the operating resilience of the key market infrastructure amid the pandemic, and the important development of digitalization, cybersecurity, as well as environmental, social, and governance aspects (ESG). The online event gathered 110 participants from related organizations, including foreign exchanges, bills finance companies, securities depositories, banks, and asset management firms. Not only did the conference show the good nature and fitting environment of Taiwan’s securities market, but it also enhanced Taiwan’s international visibility. It is hoped to attract more foreign investment into Taiwan’s capital market.

In the opening remarks, TDCC President Han-Chiang Chu said that as the only back-office institution of Taiwan’s capital market, the TDCC has endeavored to provide more diverse services for the past 30 years. To help the competent authorities launch the Capital Market Roadmap, the TDCC continues its digital transformation, keeps bolstering its cybersecurity readiness, and hopes to build a big back-office platform that is safer and more efficient for the capital market. With ESG aspects in mind, the TDCC also provides corporate governance-related services that increase transparency.

Julie Wang, TDCC Senior Vice President, also mentioned that many of the TDCC digital services play crucial roles amid the pandemic. As the core system, the book-entry system has been upgraded and digitalized for participant services. The first new service is that foreign investors can open an account online, which significantly shortens the processing time compared to the previous paperwork-based mechanism. As for shareholder rights, the fact that 97.8% of foreign shareholders use the TDCC e-voting system speaks for itself. In response to the pandemic, a hybrid shareholder meeting service was released in 2021 for investors to exercise their shareholder rights online when the curve has not yet flattened.

In 2020, the entire market has adopted the TDCC pre-settlement system – Virtual Matching Utility (VMU) for the sake of information security of the capital market. The system has massively boosted the security of securities settlement and the efficiency of processing for the market as a whole. Foreign investors no longer need to send their reconciliation data via email about which they have security concerns. In addition, the ESG services launched in 2019 keep growing and even thriving. The services have become an essential pillar of the ESG information platform for most of the issuing companies in Taiwan. It is immensely helpful for Taiwan’s enterprises to fulfill the Sustainable Development Goals (SDGs) and align with international standards.

Ms. Julie Wang emphasized, “We have seen many exciting technology applications and developments in the global capital markets. Especially in terms of digitalization, what used to take years now happened within months. The pandemic will pass, but the benefits of digitization will last.”

Foreign shareholding accounts for over 40% of the market value of Taiwan’s stock market. The market development amid the pandemic and the security level of infrastructure will be the critical aspects to observe for foreign investors. During the pandemic, Taiwan’s economic performance looks brilliant due to the strong global semiconductor demands. The steady operation of infrastructure and the digital upgrades of processing make the capital market even better. The processing efficiency for foreign investors and participants is increased and the shareholder rights for investors are safeguarded, making Taiwan an investment environment that fits the global ESG trends. The TDCC plans to continue working closely with foreign investors, securities depositories, bills finance companies, and other participants to build a more well-rounded capital market and investment ecosystem for Taiwan.