TDCC marks first partnership with ICSD participant


By Ted Chen, The China Post

TAIPEI, Taiwan — In an effort to expand Taiwan’s international bonds market, the Taiwan Depository & Clearing Co. (TDCC, 集保中心) held an account opening signing ceremony yesterday with Clearstream, an international clearing Europe-based counterpart. The event yesterday marked TDCC’s first direct partnership with an international central securities depository (ICSD), with Clearstream becoming a market participant via its account at the TDCC. The partnership is expected to bolster Taiwan’s backend operations and bridge gaps between the local and international bond markets by utilizing the same global platform, while bringing in a more complete array of services to the investing public.

Previously, on April 4, TDCC established a similar partnership with Euroclear, the world’s largest ICSD. The arrangement, however, required the facilitation of CitiBank Taiwan, who will serve as an agent financial institution.

Central Bank Deputy Director Yang Chin-long (楊金龍) stated in his address that the partnership will aid efforts in promoting the market for Formosa Bonds and renminbi-denominated financial products. Yang also stated that through the leveraging of Clearstream’s established channels to the global markets, Taiwan’s status among the major financial hubs is poised to be elevated. Yang mentioned that the government is entering the fourth phase in plans to improve the foreign currency clearing platform and begin promoting delivery versus payment (DVP) transaction mechanism.

Clearsteram Chairman Jeffrey Tessler stated that the opening of an account at the TDCC represents the first vital steps in bringing availability of the Taiwan market to investors worldwide.

In her address, Wang Li-ling (王儷玲), Vice Chairperson at the Financial Supervisory Commission (FSC), mentioned that collaboration with Clearstream also extends to its futures exchange subsidiary Eurex, whose bid to acquire stakes in the Taiwan Futures Exchange (TAIFEX) has been approved. In addition, the TAIEX Futures based on the Taiwan Stock Exchange Capitalization Weighted Stock Index is scheduled to be listed on the Eurex in the middle of May. Wang also stated that similar to the cross-straits ECFA trade agreement, the partnership with Clearstream is designed to lessen the hurdles restricting overseas investors and simplify required application processes.

TDCC Chairman Ding Kung-wha (丁克華) stated that in addition to the partnership with Clearstream, more milestones are set to be attained pending ongoing negotiations with depository and clearing institutions with 14 nations including the U.S., Japan, Germany, Singapore and Hong Kong.