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SLB Service in Taiwan Securities Market

SLB Service in Taiwan Securities Market. Taiwan Depository & Clearing Co. ACG New Service Initiative Task Force. History & Development. Stocks SLB Sep. 1996 - for “settlement” Taiwan Stock Exchange initiated the SLB system for completing settlement

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SLB Service in Taiwan Securities Market

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  1. SLB Service in Taiwan Securities Market Taiwan Depository & Clearing Co. ACG New Service Initiative Task Force

  2. History & Development Stocks SLB • Sep. 1996 - for “settlement” • Taiwan Stock Exchange initiated the SLB system for completing settlement • TDCC has processed book-entry for SLB transactions • Jun. 2003 - for “strategic trading” • SLB system was opened for institutional investors’ arbitrage, hedging or exercise related transaction • June 2005 - for “trading and exercising” • “Strategic trading purposes” requirement was abolished • The total market volume limit was adopted • more eligible securities were added to SLB system

  3. History & Development (Continue) Bonds SLB (Jan. 2004) • GreTai Securities Market (GTSM) initiated bonds SLB system • Only Federal bonds were eligible • Matching, risk management, guarantee and settlements provide by GTSM • TDCC is not engaged in any services for bonds SLB

  4. Statistic of Stocks Lending & Borrowing

  5. Factors stagnated the growth of SLB’s turnover volume • Less ECB issued • Less volatility of market price • Insurance companies suspend securities lending • No short selling under the closing price of previous trading day • Tax Concern

  6. NEXT STEPS • Solve the settlement’s problem on the sales of lent securities • Abolish price limit of indicated short sales • Allow foreign private funds to participate in SLB market • Allow to loan the borrowed securities • Assist to solve problems with the tax authority • Simplify the pledge procedure

  7. Thanks

  8. Types of SLB Transactions • Settlement Purpose SLBFor a securities firm or a securities financing enterprise to complete settlements • Trading and Exercise Purpose SLB 1. Fixed-rate transactions 2. Competitive-auction transactions 3. Negotiated transactions

  9. Participation -Trading & Exercise Purpose SLB • Permitted Lenders1. Insurance companies2. Financial institutions3. Securities investment trust companies4. Dedicated futures commission merchants, and5. Others approved by the competent authority (Such as foreign institutional investors (FINIs) and 4 governmental funds) • Permitted Borrowers1. Securities dealers2. Securities investment trust companies3. Futures dealers, and 4. Others approved by the competent authority (FINIs)

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