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Overview & Prospect of TAIFEX

Overview & Prospect of TAIFEX. CEO, Dr. Foo-shiung Ho Aug 10 th , 2005 FIA Asia Derivatives Conference Beijing, China. Market Overview. Products. Futures TAIEX Futures TAIEX Electronic Sector Index Futures TAIEX Financial Sector Index Futures Mini-TAIEX Futures

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Overview & Prospect of TAIFEX

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  1. Overview & Prospect of TAIFEX CEO, Dr. Foo-shiung Ho Aug 10th, 2005 FIA Asia Derivatives Conference Beijing, China

  2. Market Overview

  3. Products Futures • TAIEX Futures • TAIEX Electronic Sector Index Futures • TAIEX Financial Sector Index Futures • Mini-TAIEX Futures • TSEC Taiwan 50 Futures • Government Bond Futures • Commercial Paper Interest Rate Futures Options • TAIEX Options • Finance Sector Index Options • Electronic Sector Index Options • Equity Options 2005

  4. Volume Allocation by Products GBF & CPF 0.01% T5F 0.02% TX 8.65%(3.4 Mil) MTX 1.46% Electronic Sector Index Futures 1.40% Finance Sector Index Futures 1.31% Electronic Sector Index Options 0.78 % Finance Sector Index Futures 0.79% Equity Option 1.43% TXO 84.15%(33.2Mil) As of June 2005

  5. Market Growth

  6. Trading Structure

  7. Strategies and Prospect

  8. Product Development • Diversification • Interest rate futures • Gold futures • Foreign currencies denominated products

  9. Foreign Participation • Foreign access to Taiwan futures market • foreign traders • 4.53% of the trading volume , 2004 • 3.71%, 2005(Jan-Jun) • FCM members • 4 foreign FCMs

  10. Foreign Institutional Investors Participation Procedure Designate a custodian bank to: • Apply for a foreign institutional investor (FINI) registration number from the Taiwan Stock Exchange Corp (TSEC) • Apply for an approval of opening hedge accounts from the TAIFEX to exempt position limit required by product rules • Open hedge accounts with consigned brokers

  11. Development on Foreign Participation(I) • Planning on allowing foreign trading at TAIFEX for speculative and arbitrage purposes • Feasibility of recognition of omnibus accounts

  12. Received No-Action Letter from CFTC June 2nd, 2004, on TAIEX & Mini-TAIEX futures May 16th, 2005, on TE &TF Futures Starting the process of preparing a filing of Part 30 exempt with CFTC Development on Foreign Participation(II)

  13. Improvement on IT System • Continue to upgrade and expand the IT systems, • Explore the system with connectivity functions more open and cost-efficient for access • Expand system capacity of transaction processing • Upgrade and enhance with more business functionality • Improve market data dissemination

  14. Risk Management • Changes on margining mechanism • Covered call • Collateral margin • Portfolio risk management on margining • foreign currencies for margin in trading local futures products

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