FSC Expands Securities Trading Assistant Services to Include ETFs, Benefiting 10 Futures Firms

(CNA reporter Su Szu-yun, Taipei, May 11) The Financial Supervisory Commission (FSC) announced today that the scope of securities eligible for trading through futures firms currently operating as securities trading assistants will be expanded. Previously limited to listed and OTC stocks and GreTai securities, the new rules will now include ETFs and index-linked investment notes (ETNs), broadening investment strategy options. Ten futures firms will benefit from this change, with implementation scheduled for June 15, 2024.

Huang Hou-ming, Deputy Director of the FSC's Securities and Futures Bureau, explained that while futures firms primarily engage in futures trading, ten of them currently also serve as securities trading assistants. These firms can act on behalf of securities brokers to solicit clients, open accounts, accept trading orders, and forward them to securities firms for execution. Currently, eligible securities are limited to listed and OTC stocks (including margin trading), GreTai stocks, public share offerings, and foreign securities trading.

To enhance service convenience, Huang stated that the FSC will amend relevant regulations to expand the range of eligible securities beyond listed and OTC stocks to include all securities traded on the Taiwan Stock Exchange and the GreTai Securities Market.

The expanded list will include passive ETFs, actively managed ETFs, exchange-traded notes (ETNs), call and put warrants, beneficiary securities (such as REITs and REATs), Taiwan Depositary Receipts (TDRs), convertible and exchangeable bonds, and bonds with attached share warrants.

Huang explained that many investors engage in both futures and spot trading to execute hedging and arbitrage strategies. Without this expansion, clients would need to place orders separately through futures and securities firms for cross-market strategies. By broadening the scope of securities that trading assistants can handle, futures firms can now offer clients a one-stop investment solution.

Regarding the benefits of the new system, Huang noted that futures firms will gain additional fee income and attract more clients through expanded product offerings. For investors, this change will facilitate cross-product portfolio strategies, including ETF-based investments.

According to FSC statistics, the total trading volume of securities trading assistants from January to April 2024 reached NT$185.808 billion, a 187.5% increase compared to NT$64.632 billion during the same period last year.