Taiwan: Sec lending ETFs barred from currency reform
17 March 2016 Taipei
Image: Shutterstock
Exchange-traded funds (ETFs) involved in securities lending have been excluded from the latest round of regulatory reforms from the Taiwan Stock Exchange (TWSE) on dual-currency trading mechanisms.
Taiwan’s borrowers and lenders will miss out on the opportunity to branch into adding yuan certificates to ETFs, as opposed to being limited to the Taiwan dollar.
Investors can also convert from the ETF in one currency to another at a one-for-one conversion ratio.
The exchange aimed to “to satisfy investors' demands for diversified products and asset allocation in various currencies”, but deemed it necessary to exclude securities lending, among other transactions, from the amendments.
TWSE stated: “Added ETFs should be neither involved in day trades, margin transactions, borrowing of securities, and borrowing or lending money or used as collateral and underlying assets of warrants, nor subscribed or redeemed.”
Taiwan’s borrowers and lenders will miss out on the opportunity to branch into adding yuan certificates to ETFs, as opposed to being limited to the Taiwan dollar.
Investors can also convert from the ETF in one currency to another at a one-for-one conversion ratio.
The exchange aimed to “to satisfy investors' demands for diversified products and asset allocation in various currencies”, but deemed it necessary to exclude securities lending, among other transactions, from the amendments.
TWSE stated: “Added ETFs should be neither involved in day trades, margin transactions, borrowing of securities, and borrowing or lending money or used as collateral and underlying assets of warrants, nor subscribed or redeemed.”
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