Financial and Technology News

FSC head aims to expand plans to all traded firms

 2016/05/11
The Financial Supervisory Commission (FSC) on Saturday sought to expand proposed investment plans to include all of Taiwan’s publicly traded companies, in addition to the financial sector.
Over the past few weeks, FSC Chairman Ding Kung-wha has drafted plans to promote investment in innovative start-ups through mezzanine financing and angel investment funds as a way to help boost the nation’s languishing economic growth and listless trading on the local bourses.
Ding’s plans also aim to stem the flow of capital from Taiwan, in an attempt to boost domestic investment.
Lawmakers had previously raised viability concerns about Ding’s proposal for financial sector companies to allocate 2 percent of after-tax earnings toward the incubation of promising start-ups, due to high risks associated with investing in emerging companies.
Precedent shows that about 90 percent of start-ups fail, lawmakers said.
Despite the concerns, Ding on Saturday expanded the proposal to include companies listed on the Taiwan Stock Exchange and the Taipei Exchange. He revised his proposal following a meeting with representatives of the life insurance, property insurance, securities and futures brokerage and securities investment trust and consulting industries.
Securities and Futures Bureau Acting Director-General Chang Li-chen said officials at the two bourses would help oversee efforts to encourage companies’ participation, while the commission would continue to fine-tune the proposal and explore appropriate easing measures.
Life Insurance Association of the Republic of China chairman Paul Hsu said that given adequate tax incentives, a number of insurers would be willing to furnish more than 2 percent of after-tax profits.
Last year, Taiwan’s listed companies reported aggregate net income of NT$1.83 trillion (US$56.3 billion at the current exchange rate), equivalent to a prospective NT$36.6 billion angel investment fund under the proposed 2 percent contribution. The figure would likely exceed the maximum contribution by the financial sector alone, which reported aggregate profits of NT$561.4 billion last year.
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