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TWSE, KRX sign MOU, focusing on ETF market expansion

TWSE, KRX sign MOU, focusing on ETF market expansion

Taipei, Dec. 12 (CNA) The Taiwan Stock Exchange (TWSE) and its Korean counterpart -- the Korea Exchange (KRX) -- have signed a memorandum of understanding (MOU) to forge closer cooperation, aiming to expand exchange traded funds (ETF) trading for both stock exchanges. Under the newly signed MOU, the TWSE and the KRX will also work together to compile indexes, launch market promotion activities for both sides and boost bilateral exchanges, including mutual visits by personnel of the two stock exchanges. The new MOU was signed Friday based on an earlier agreement on cooperation and exchange inked by the TWSE and the KRX in 2000, according to the Taiwanese stock exchange. The TWSE says the future efforts to expand ETF trading and jointly compile indexes with the KRX are expected to meet a global trend in which securities trading in the regional capital markets has become more international. In the future, investors in Taiwan are expected to trade ETFs tracking securities listed in South Korea, while investors in Seoul are expected to follow the Taipei equity market by trading ETFs linked to Taiwanese equities, the TWSE said. Lee Sush-der (???), chairman of the TWSE, said that with regional economies on the rise, the capital markets in Asia have become more important to its fund-raising. He added that cooperation of regional stock exchanges has played a critical role under such circumstances. The ties between the TWSE and the KRX were "in line with the Financial Import Substitution Program, which has been launched by Taiwan's Financial Supervisory Commission (FSC), as well as its efforts to encourage the further internationalization of the Taiwan capital market," Lee said. The FSC is the top financial regulator in Taiwan. Echoing Lee, Choi Kyungsoo, chairman of the KRX, said that the signing of the new MOU is expected to help both sides grow by exploring more business opportunities in the ETF markets. Choi said that both the TWSE and the KRX have many mature and active investors' participation, and the trading time of both is almost the same. That has paved the way for future cooperation. Choi added that Taiwan and South Korea, which are part of the four Asian Tigers, have similar industrial structure, in particular in the information technology sector so the equity markets on the both sides should work together based on such a good foundation. According to the TWSE, ETF turnover in Taiwan for the first 11 months of this year topped NT$1.47 trillion (US$44.55 billion), accounting for 7.13 percent of the total trading volume on the main board, up from 1.88 percent recorded in 2014. In South Korea, more than 200 ETFs have been listed on the KRX with 2.1 trillion Korean (US$1.78 billion) won in total assets, about 60 times the size recorded in 2002, the TWSE said. (By Han Ting-ting and Frances Huang)


Updated : 2021-09-19 09:44 GMT+08:00