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An Overview of the Taiwan Futures Market

An Overview of the Taiwan Futures Market. Foreign Investment Status. Factors of Success. Communicate to understand the requirements of investors. Feedback by actions. Action 1 - Relax of Open Position Value.

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An Overview of the Taiwan Futures Market

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  1. An Overview of the Taiwan Futures Market

  2. Foreign Investment Status

  3. Factors of Success • Communicate to understand the requirements of investors. • Feedback by actions

  4. Action 1 - Relax of Open Position Value • Open position Value for FINI had been increased from 30% to 100%. It is based on the aggregate market value of related shares of Taiwan Index Futures held by such FINI sub-account as of the previous business day.

  5. Action 2 - Product developments • Taiwan Index Option • Taiwan Single Stock Option • TSEC Taiwan 50 Index …..etc

  6. Action 3 – Decrease of Investment Cost • The transaction tax on Taiwan Futures products had been decreased 50% from 0.5 per 1000 (each side) to 0.25 per 1000 (each side).

  7. Action 4 – Advertising and Bench Marking • Provide Training to local and overseas investors. • Built up communication channels with foreign investors – through Foreign Investment Banks and Custodian Banks • Bench Mark with Overseas Futures Exchanges

  8. Possible Further Developments (More Request from Investors)

  9. Requirement 1 - Cost • Eliminate transaction Tax • Simplify regulatory reporting / reporting procedures to decrease the operating cost of custodian banks = decrease transaction cost of investors. e.g. (transaction fee USD10-20, administration fee USD1000-2000, custodian fee base on contract value)

  10. Requirement 2 - Price FluctuationLimit • The 7% fluctuation limit may not be able to meet the market requirements. 10 – 15% fluctuations would be more appropriate.

  11. Requirement 3 – from Hedging to Trading • Allow Foreign investors to trade Taiwan Futures / Options not just limited to hedge purpose

  12. Action 4 – Diversify of Hedging Tools • Stock Borrowing and Lending

  13. Requirement 5 - Foreign Business Co-operations (Market Maker and Products Issuer) • Built up business relationship with foreign exchanges and foreign futures brokers to launch more new products and allow foreign brokers to be Marker Makers. e.g. SIMEX – MSCI – Taiwan Index HKEX – Nasdaq – US Stock Index

  14. Requirement 6 - Trading and Settlement Practice • Allow position rollover for Trading • Allow Give in / Give Up for settlements

  15. Why further Open Futures Market • The growth rate of Taiwan Futures Market is a well prove • Put birds in your own pocket

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