NT dollar deposits placed by foreign investors for the purpose of investing in the local securities market should be kept in check
PRESS RELEASE Release Date: March 11, 2008
NT dollar deposits placed by foreign investors for the purpose of investing in the local securities market should be kept in check
The Central Bank of the Republic of China (Taiwan) would like to reiterate that funds remitted by foreign portfolio investors into Taiwan for the purpose of investing in the local securities markets must be deployed in a manner consistent with the designated purpose these same investors had stated when their funds were converted into NT dollars. NT dollar funds held by foreign portfolio investors ought not to be parked in NT dollar deposit accounts for extended periods of time. This practice would give the impression that these investors are using the equity markets as a guise for speculating in the local currency market.
The Central Bank of the Republic of China held a discussion with the Securities and Futures Bureau of the Financial Supervisory Commission and a group of major custodian banks earlier today. The custodian banks in attendance agreed to convey the following message to their clients.
The market ought to put into effect some form of self discipline. NT Dollar deposit accounts held by foreign investors were set up for the express purpose of settling securities transactions. If the outstanding balance of an account exceeds the market value of what the foreign investor has invested in the local securities markets by more than a reasonable amount, the investor in question should, following a notice from the competent authorities, invest the superfluous balance in the securities markets as soon as possible or remit it outwards.