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 Revision of International Bonds Trading Rules June 5, 2006 To bring Taiwan’s Bond market more in line with the international market and make it more liberal, the Financial Supervisory Commission has released many open-up policies. It amended Regulations Governing the Offering and Issuance of Securities by Securities Issuers and Regulations Governing the Offering and Issuance of Securities by Foreign Securities Issuers on March 3 and April 4, 2006, respectively. This move has added legal basis for domestic and foreign issuers to issue foreign currency denominated bonds. GreTai Securities Market accordingly amended regulations governing international bonds trading at GreTai, and received approval on May 30, 2006 from the Financial Supervisory Commission. A number of foreign currency denominated bonds have been added to the pool of fixed income securities allowed to trade at GreTai. These bonds are as follows: 1. Domestic public offering companies: bond through public placement, convertible bond, overseas convertible bond, corporate bond DDwith warrant, and overseas corporate bond with warrant. 2. Foreign enterprises: bond through public placementThe bond that obtains most attention is local company issued European DDConvertible Bond. In the future these convertible bonds can list on GTSM one month after its issuance. The advantages of applying DDto list in Taiwan include: 1. To enlarge the ECB secondary market: the overall market liquidity can be enhanced and the issuers can therefore lower its capital DDraising cost. 2. To increase price transparency: After the issuers apply to list domestically, ECB prices can be more transparent and the spread DDmay well shrink. Local investors can obtain fair quotes and subsequently reduce their trading cost. 3. To expand local securities firms’ business scope. 4. To help issuers better understand the market price of their bonds DDIn addition, to comply with the Financial Supervisory Commission’s rating limitation, rating of GTSM’s international bonds has DDrisen from BBB- to BBB and above. There existed no rating requirement for equity linked international bonds according to DDRegulations Governing the Offering and Issuance of Securities by Securities Issuers. |
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