Taipei-basedBank SinoPac is hoping to become the first domestic firm to offer equity index options, and down the line, equity swaps. The bank is applying to Taiwan's central bank, the Central Bank of China in Taipei, for approval, according to Henry Chang, head derivatives dealer. SinoPac plans to target its private banking customers who are looking for exposure to other markets via stock indices including the Nikkei 225 and NASDAQ Stock Market.
If the options prove to be a success, the bank will likely look into other products, such as equity swaps, said Chang. He added that at the present, while some investment banks were offering the product offshore, only Citibank and ABN AMRO are pitching on-shore equity index options. Officials at the firms declined comment.
Several local Taiwanese banks are applying for licenses to market equity index options but few likely are capable of warehousing risk from these positions, according to a market official.
