Société Générale has received approval from Taiwan's Securities and Futures Commission (SFC) to issue exchange-traded warrants and other firms, including Deutsche Bank and ABN AMRO, are looking to join the fray. The SFC next month will change regulations to allow banks, as well as securities firms, to apply for licenses. Previously Merrill Lynch--which received approval in 1999--had been the only foreign securities house to issue warrants, said Kathy Lu, an official at the SFC in Taipei.
Because Merrill and SG applied as securities houses rather than banks they were able to receive approval before the regulatory change. However, firms must still first get approval from Taiwan's central bank before the SFC will grant a license, added Lu. As a result of the expected change in the regulation and the bottoming out of Taiwan's equity market the firms are keen to get a license.
ABN AMRO's Asian head of equity derivatives in Hong Kong, Frank McKirgan, said, "we're in the middle of the application process." While Prakash Krishnan, spokesman at Deutsche Bank in Singapore, said it expects to receive a license within the next few months. McKirgan declined further comment.
An official at Deutsche Bank continued that currently there are 35-40 outstanding warrants in Taiwan. Angel Yeung, spokeswoman at SG Asia in Hong Kong, did not return calls by press time. Officials at Merrill Lynch and SG declined comment.
