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The Taiwan Stock Exchange ("TWSE") invited the Japan Exchange Group ("JPX") to join the 'Capital Market Cooperation Forum', which took place today. At the forum, both stock exchanges discussed cooperation opportunities covering both the Taiwan and Japan capital markets.
The forum attracted over 200 participants, including Taiwan capital market professionals, officials and academia. Mr. Ming-Chung Tseng, the Chairman of the Financial Supervisory Commission joined and gave the keynote speech outlining prospects for developing the Taiwan Capital Market. Mr. Lee Sush-der, Chairman of TWSE and his counterpart Mr. Atsushi Saito, CEO of JPX, also joined and talked about potential bilateral collaboration in five separate areas, including the exchange of personnel, the exchange of technical knowledge, as well as listing, trading and marketing.
Mr. Lee also joined a panel with Dr. Tien-Mu Huang, Vice Chairperson of the Financial Supervisory Commission, Mr. Chi-Hsien Lee, General Manager of the Gretai Securities Market, Mr. Hung-wen Chien, Chairperson of the Taiwan Securities Association and Dr. Yin-Hua Yeh, Professor at the National Chiao Tung University. The panel engaged in an active discussion, ensuring that the recommendations arising for the forum will serve as a good reference point for future developments.
In 2000, TWSE and JPX began promoting cooperation and exchanges in the financial sector after signing a "Memorandum of Understanding on Cooperation". From 2010 onwards, TWSE visited Japan on a number of occasions to promote investment opportunities in Taiwan, as well as investment and financing opportunities to investors and companies in Taiwan. In 2013, TWSE and JPX signed a "Memorandum of Understanding for the Mutual Cooperation in the field of Financial Supervision", which laid the foundation for deeper financial cooperation, while strengthening existing bilateral agreements between Taiwan and Japan, to boost economic development.
Experts at the forum discussed the following areas of potential cooperation:
- Market promotion: both stock exchanges will increase the availability of investment information in Chinese and Japanese on each other's market; both exchanges will also work to publicize Taiwanese/Japanese companies in each other's market, such as inviting well-known listed companies to conduct investment seminars etc. in each market, to help investors learn about both securities markets
- Exchange of personnel and exchange of technical knowledge: TWSE and JPX will regularly exchange personnel in order to learn more about the operations of each exchange, promote mutual understanding and explore opportunities for cooperation; this could include regular interactions between both stock exchanges, such as the sharing of information about new trading patterns and technology in order to foster innovation within both markets
- Product development: Taiwanese brokers will be encouraged to develop stock warrants linked to Japanese indexes or stocks, particularly the JPX-Nikkei 400 Index, which uses ROE as the main criteria so that domestic investors can gain exposure to the Japanese market with smaller-sized investments; both exchanges also proposed the idea of developing a cross-market index.
- Cross-border listings: with ETFs proving to be a promising prospect and starting point for future bilateral cooperation, both exchanges actively discussed the possibility of issuing cross-border ETFs to provide a safe, transparent and convenient channel to conduct cross-border investment. This is also in-line with Taiwan's 'financial industry import substitution' policy, which aims to keep capital and talent in Taiwan.
- Cross-border trading: in order to foster long-term cooperation between Taiwan and Japan, participants also proposed establishing a cross-border trading platform which could provide investors with more investment options. It could also provide an additional financing platform for Japanese issuers, enhancing the level of cooperation between both markets.
Many Taiwanese and Japanese companies are already closely linked with each other, with technologically innovative Japanese companies often developing synergies with Taiwan's competitive manufacturers. The forum provided an opportunity for participants to deepen their understanding of the Japanese market, as well as opportunities for high-level bilateral cooperation. In the future, promoting more bilateral exchange and cooperation between TWSE and JPX will provide more investment options for investors and will further strengthen the development of Taiwan's economy.
Mr. Lee, said, "Strong economic and trade relations, close industrial cooperation and frequent cultural and tourism interactions between Taiwan and Japan has resulted in an accumulation of good will. The core values of our capital market is the support of industrial development, helping the real economy and creating more demand for our capital markets, forming a positive cycle. As global capital markets become more open, I believe both Taiwan and Japan can complement each other and enhance their competitiveness and influence in the Asia-Pacific region by expanding their existing base, building consensus, and jointly developing both markets."
