A Case Study for the Effect on Local Capital Market of Off-boarder Funds in Taiwan

• Main Authors: Chih-hsien Lai, 賴志賢
• Other Authors: Wen-Dwo Yang
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/5csfz6

碩士 === 國立臺灣科技大學 === 管理研究所 === 95 === A well Finance system is very important to economic activity in a country. For the Financial system built up which is based on the function for saving funds can be converted into constructive or valuable investment. Thus, the objective of the Finance system is to make more convenient and circulative for funds to achieve a fully capital market then promoting economic improvement. In the category of fund circulation, if fund suppliers via buy-in securities to lend-out their fund or fund demander via securities issuing to obtain the fund, for those processes are called Direct Financing. On the contrary, if the fund suppliers deposit their fund in a bank or other intermediaries then they make a loan to those fund demanders, that is called In-direct Financing. The Taiwan Stock Exchange Corporation, TSEC, has been established for 45 years since February of 1962. In the year of 1988, the Government allowed new security houses to set up. For the past 20 years, it made the Taiwan Stock market become more and more active. Especially, Taiwan stock market has invited lots of investors to get involved and showed their money to the world. At that time, Taiwan stock market Index also broke through the record high to 10 thousand points, but that was just an economic activity in the Island of Taiwan which did not let the capital market of Taiwan to get connected with global, so it did not have more interactions with the world. Till 1980, the Government formally opened foreign investors, Qualified Foreign Institutional Investor (QFII) to invest in Taiwan’s capital market, then the banking internationalization can be approached and become the major source of power and energy for promotion of internal economic development. For the past 10 years, the Government continually extended foreign securities and future houses to set up their branches in Taiwan. In the meantime to lift lots of restrictions in foreign investors investing in local market etc…. That is the main purpose to push Taiwan capital market going forward Internationalization. Besides this, foreign derivative products, such as offshore stocks and funds are also allowed to be invested for local investors. It provides local investors diversified and various options to invest in global commodities. Though, off-boarder funds have been sold for more than 10 years in Taiwan, due to uncompleted local regulations, unclear market information, it made lots of under-table investments at that time. However, Government and regulator always do not have a well management in off-boarder funds. That is why regulator was asked to draw up related regulations. Thus Off-boarder fund is under governance of SFB. 1 August 2005 the Rules of off-boarder fund governance (境外基金管理辦法) was born. 1st August 2006 the structure of General Representative was also established. It made the market system more complete and transparent. Market activity and cash flow can also be monitored well by Government and CBC (Central bank of China). By the way, many of Securities houses, banks and other Intermediaries be as the General Representative of various off-boarder funds in Taiwan, so as there are more and more off-boarder funds sold in Taiwan. Furthermore, local fund houses issued more and more offshore product fund, many scholars suspect all of these might cause huge money investing out of this country and not sure if impacted to local stock and mutual fund markets. Therefore, the major concern is arising from widely opening the off-boarder fund completely in local capital market is what this dissertation to study.