Taipei, The Taiwan Stock Exchange (TWSE), which operates the local main board, has signed a cooperative memorandum of understanding with two other bourses in the region, in an effort to lift the global visibility of Taiwan equities.
Under the MOU signed Thursday, the TWSE, Japan Exchange Group, Inc. (JPX) and the Korea Exchange (KRX) agreed to strengthen their already close business ties.
The MOU is aimed at expanding cross-border cooperation in the capital markets in the Asia Pacific region by sharing information in areas of mutual interest and integrating efforts to develop the three markets, the TWSE said.
"The Taiwan Stock Exchange has long-term relationships with JPX and KRX," TWSE Chairman Hsu Jan-yau (???) said in a statement. "We are excited to extend the cooperation to a trilateral aspect. We look forward to collaborating together to further strengthen our connection, to increase our visibility in the Asia Pacific and to provide top notch investment opportunities to investors."
According to the TWSE, the JPX has a fully integrated market infrastructure, with its business domain covering cash and derivatives market operation, self-regulation, and clearing.
The KRX, meanwhile, operates the centralized securities and derivatives markets, where stocks, bonds and derivatives are traded on a common platform, the TWSE said.
Currently, there are seven exchange traded funds (ETFs) on the Taiwan main board that track equities in Japan. TAIEX Futures, which track the benchmark weighted index on Taiwan's main board, are also traded on the Osaka Exchange.
In addition, Taiwan's Yuanta Securities Investment Trust Co. has launched the Yuanta KOSPI 200 ETF in Taipei to track the KOSPI 200 Index, which comprises 200 large-cap stocks on the KRX and is the benchmark index in the Seoul market, while TAIEX ETFs are also traded in Seoul.
The MOU was the first three-way cooperative agreement signed by the TWSE, which has been aggressively seeking to extend its reach in the global capital market.
The agreement came in the wake of an announcement by global index provider MSCI Inc. that it planned to partially include large-cap China A-Shares in the MSCI Emerging Markets Index and the MSCI All Country World Index, with effect from June.
The inclusion of Chinese yuan-denominated A shares in the MSCI indexes is likely to prompt foreign institutional investors to divert funds from other markets into the Chinese market, according to analysts.
Source: Focus Taiwan News Channel