Qualification
Futures Trading by Overseas Chinese and Foreign Nationals
I.Preface
- The government published "Guidelines for Futures Trading by Foreign Institutional Investors and Overseas Chinese and Foreign Nationals Within and Outside ROC Territory" in 1998, permitted foreign investors to engage in short positions of futures trading for hedging purpose.
- For the purpose to increase the level of foreign participation in Taiwan Financial market, the government further relaxed the restrictions on foreign investments in our securities market and cancelled the QFII system in 2003. As a result, foreign institutions that intend to invest in Taiwan securities market only need to register with Taiwan Stock Exchange (TWSE) instead of applying to the SFB for approval. In concurrence with the policy change, the competent authority also modified the "Guidelines for Futures Trading by Foreign Institutional Investors and Overseas Chinese and Foreign Nationals Within and Outside ROC Territory" into "Guidelines for Futures Trading by Overseas Chinese and Foreign Nationals" and other relevant rules and regulations.
- On June 30, 2004, the government permitted foreign investors to engage in long positions of futures trading as the hedge of equity investments.
- The government promulgated "Directions for Futures Trading by Overseas Chinese and Foreign Nationals" on 17 March 2006(and abolished the “Guidelines for Futures Trading by Overseas Chinese and Foreign Nationals“ on March 27, 2006), and issued an order on 27 March 2006 to allow foreign investors to engage in non-hedging futures transactions that is regulated by the Futures Trading Act and other relevant rules. and cancel the limitation of not to exceed 30% of its inward remittance of funds The government also launched the omnibus account in futures market to provide overseas Chinese and foreign nationals a quick and easy way to trading futures through their native FCMs.
II.Qualification
Overseas Chinese and foreign nationals includes overseas Chinese and foreign nationals in the Republic of China (ROC) and overseas Chinese and foreign nationals outside the ROC.
- "Overseas Chinese and foreign nationals in the ROC" means natural persons or foreign institutional investors with residence in the territory of the ROC that hold an overseas Chinese ID card or an alien resident certificate.
- "Overseas Chinese and foreign nationals outside the ROC" means overseas Chinese and foreign nationals, including natural persons and foreign institutional investors outside the territory of the ROC.
- "Foreign institutional investor" means either an institutional investor established outside the ROC territory in accordance with local law, or a branch company established in ROC territory by an overseas juristic person.