Taiwan's Securities And Futures Commission is preparing to launch the onshore equity-linked note market this summer in a step to liberalize the market. "This will happen in June or July," according to an official at the SFC. The SFC had initially planned to launch the products by April (DW, 11/24) but market officials said it had been slowed by issues surrounding the settlement of derivatives as well as negotiations between regulating bodies. The government will likely first permit local houses to offer the products then further open it to foreign players. The official at the SFC declined further comment.
"We're preparing for this," said Jeffery Huang, head of interest rate derivatives at KGI Securities in Taipei, noting that KGI is in the preliminary stages of drafting marketing materials. Products will likely embed over-the-counter options and be hedged. Huang estimated over TWD50 billion (USD1.43 billion) of these instruments could be sold this year. The notes will be targeted to retail clients and likely range from TWD1-10 million.
