November 06, 2014

Richard Hoey’s Economic Outlook for 2015

Move expands investor connectivity opportunities for Taiwanese companies in North America by permitting non-capital raising Level I DRs

Written by: Richard Hoey | Chief Economist, BNY Mellon and Dreyfus

Richard Hoey’s Economic Outlook for 2015

HONG KONG, Nov. 6, 2014 /PRNewswire/ -- Taiwan's Financial Supervisory Commission's (FSC) announcement to amend its regulations to allow over-the-counter (OTC) non-capital-raising Depositary Receipt (DR) programmes could make investing in Taiwanese companies more accessible for global investors and may encourage increased foreign investment into Taiwan, says BNY Mellon.  

The amendment of the 'Regulations Governing the Offering and Issuance of Overseas Securities by Issuers' allow Taiwanese listed companies to establish sponsored Level I non-capital-raising DR programmes. This new scheme will provide global investors with more convenient access to Taiwanese companies and will benefit these companies by broadening their shareholder base internationally without the costs associated with listing on an overseas stock exchange. Qualified issuers already listed on the Taiwan Stock Exchange (TWSE) and GreTai Securities Markets will not have increased reporting requirements in order to trade on the U.S. OTC Markets.

"Taiwan has long been a popular destination for international investors, known as FINIs in Taiwan," observes Neil Atkinson, head of Asia-Pacific for BNY Mellon's Depositary Receipts business.  "We are often asked, particularly by US investors, to establish DR programmes for Taiwanese companies but have been restricted from doing so by regulation."

Atkinson adds: "The FSC's ground-breaking announcement to introduce new rules around Level 1 DRs is timely as research suggests there is growing demand from Taiwanese companies to be able to increase their international ownership, and global investor sentiment toward Taiwan is buoyant. Accordingly, we may see more Taiwanese companies using DRs in 2015."

About DRs

For investors, DRs are an attractive route to entry in a market because they offer a combination of convenience, simplicity and flexibility when compared to direct investment in a foreign market and satisfy investors' home market bias. Permitting the establishment of non-capital raising Level 1 DR programs allows for greater access by Taiwanese companies through DRs to potentially meet some of the demand not satisfied through routes previously available.

In permitting OTC non-capital-raising DRs, Taiwan would join more than 60 countries worldwide whose companies have created opportunities for secondary market DR investors.

DRs play an essential role in cross-border trading and are a preferred instrument both for companies listing their shares on global markets and for many investors seeking international portfolio diversification. DRs can broaden the range of investors who invest globally, and can enhance the visibility of an issuer's securities.

Since the 1920's, investors, companies, and traders have used DRs to meet their needs. According to BNY Mellon data as of 30 June 2014, there are more than 3,700 DR programmes available to investors, representing issuers from more than 70 countries. Nearly 4,600 institutions invest over $820 billion in DRs globally.

Notes to editors:
BNY Mellon acts as depositary for more than 2,800 American and global depositary receipt programs, acting in partnership with leading companies from over 65 countries. BNY Mellon is committed to helping securities issuers access the world's rapidly evolving financial markets and delivers a comprehensive suite of depositary receipt services. Learn more at

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of Sept. 30, 2014, BNY Mellon had $28.3 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on, or follow us on Twitter @BNYMellon.

This release is for informational purposes only. BNY Mellon provides no advice nor recommendation or endorsement with respect to any company or securities. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities. Depositary Receipts: Not FDIC, State or Federal Agency Insured; May Lose Value; No Bank, State or Federal Agency Guarantee. BNY Mellon provides no advice nor recommendations or endorsement with respect to any company, security or products based on any index licensed by BNY Mellon, and we make no representation regarding the advisability of investing in the same.

Contacts: Louisa Bartoszek
+44 30 7163 2826