Taiwan, Korea exchanges sign new co-operation accord

The stock exchanges in Taiwan and have signed a Memorandum of Understanding (MoU), under the terms of which they have agree dto work together to expand their ETF (exchange-traded funds) markets, jointly compile indices, conduct market promotion activities and engage in bilateral visits to share experiences. The MoU will also help create closer ties and links between the Taiwanese and Korean capital markets, they say.

Sush-der Lee, chairman of the TWSE, said: “The TWSE has been proactive in building co-operative alliances with overseas bourses in line with the increasing trend of cross-border collaboration between global stock exchanges. This is also in line with the Financial Import Substitution Program, which has been launched by the Financial Supervisory Commission (FSC), as well as its efforts to encourage the further internationalisation of the Taiwan capital market. By focusing on indices and ETFs, this partnership will take advantage of the flourishing investment trend of global indexing. ETFs that track the Korean equity market will soon be available in Taiwan, and similarly, we expect ETFs that track the Taiwanese equity market will be launched on the Korean market in the future.”

Choi Kyungsoo, chairman and CEO of KRX, said: “Taiwan and Korea are both ‘Asian Tiger’ economies. Not only do both markets share similar social, economic and cultural development experiences, the industrial structure of both markets also resembles each other. Both societies are well-known for their IT talents and high-tech industries, with each capital market being made up by well-educated and active investors and sharing similar trading hours. These are great foundations for cooperation. We believe that the signing of the MoU between the two bourses can give rise to new opportunities to grow the ETF markets in Taiwan and in Korea.”

The duo say the MoU will build on an earlier Memorandum of Understanding on co-operation and exchange signed by both in 2000, with the new MoU allowing both sides to explore more opportunities to deepen their partnership in anticipation of reaching broader and deeper cooperation. As both exchanges start to license ETF products, jointly compile indices and organise more exchange visits, the TWSE and KRX expect that investors will soon be able to access more diversified investment products and better services, bringing mutual prosperity to the Taiwanese and Korean capital markets.