Team Taiwan of "Sub-brokerage x Cross-Border Custody": A New Era of Collaborative Win-Win Solutions
2024/09/24
On September 24, Taiwan Depository & Clearing Corporation (TDCC) held a press conference titled "Sub-Brokerage x Cross-Border Custody—A Collaborative Win-Win Approach" in partnership with 13 securities firms, and formed Team Taiwan together to achieve three main objectives: reducing costs for securities firms, enhancing service convenience, and ensuring investor asset protection, and to mark a new era in cross-border custody for sub-brokerage.
Chen-Shan Chang, Director-General of the Securities and Futures Bureau, FSC, stated that the global capital market is flourishing, attracting many Taiwanese investors to use "sub-brokerage service" as an investment channel through domestic securities firms. Currently, there are 38 securities firms in Taiwan operating sub-brokerage services, covering 49 countries markets with 72 exchanges. The sub-brokerage investment has a rapid growth this year, with transaction amounts reaching USD$158.1 billion in the first eight months, surpassing the total volume of the previous year. As trading volumes increase, the safety of investors' assets becomes even more important. In May, the FSC amended regulations to allow securities firms to entrust TDCC with the custody of foreign securities, providing more flexibility and enhancing investor protection, thus creating a win-win situation in the market.
Bing-Huei Lin, Chairman of TDCC, emphasized that under the guidance of the FSC, TDCC provides various services to the financial market and has years of experience in cross-border custody. The scale of foreign securities custody has reached NT$5 trillion. Starting this year, TDCC has collaborated with four major global custodians—Euroclear, Clearstream, Citi, and JPMorgan—to leverage local advantages in the sub-brokerage of foreign securities. This partnership not only reduces custody costs and risks but also enhances efficiency through inter-agency integration. TDCC has established automation and standardization systems, providing 24/7 uninterrupted service to create a safer trading environment.
With joint efforts from securities firms, TDCC's sub-brokerage services have been fully established. The 13 securities firms include Yuanta Securities, MasterLink Securities, SinoPac Securities, Taishin Securities, Mega Securities, President Securities ,First Securities, IBF Securities ,Cathay Securities, Fubon Securities, Hua Nan Securities, KGI Securities and Capital Securities, have signed agreements with TDCC,which accounted for 90% of the market share in transaction amounts in 2023, highlighting their significant influence in the market.
TDCC has 3 visions of "a comprehensive financial asset custody platform", "leading digital innovation in financial services", and "promoting sustainable development in the financial market" that enables it to continuously collaborate with securities firms to provide comprehensive investor services. In the future, it will focus on multi-asset cross-border custody for sub-brokerage, striving to enhance the value of asset activation and assisting regulatory authorities in establishing a new financial market that balances safety and development, and become an essential foundation of financial infrastructure for Taiwan as an asset management hub in Asia.