The Taiwan Monthly

Sep. 2021

Market & ETP Overview

The TWSE creates a new cluster for financing and drives economic development enhancement

The opening ceremony of the Taiwan Innovation Board (TIB) and the Pioneer Stock Board was held on July 20, 2021. Premier Tseng-Chang Su of the Executive Yuan led Chairman Tian-Mu Huang of the Financial Supervisory Commission, Chairman Ming-Hsin Kung of the National Development Council, as well as the Taiwan Stock Exchange and the Taipei Exchange, to start the ceremony. This symbolizes the joint effort of the government's industrial policy and the capital market to support new ventures and bridges the ecosystem of innovative enterprises with the Taiwan capital market. This signifies a pivotal milestone in the national economic development.

Equal emphasis on investment protection and national economic

The Securities and Exchange Act starts with a clear statement that endows the capital market with the weighty responsibility of investment protection and national economic development. In order to achieve the purpose of investment protection, the Taiwan Stock Exchange has been strictly controlling the quality of listed companies through capital and profit requirements and careful review. Therefore, most enterprises must develop to a relatively mature and stable stage, have a certain operation scale and be profitable before they can enter the capital market for listing and financing. The objective of this system is to protect the general investing public. Continual review and refinement benefit new ventures with key core technologies or innovative business models, which cannot apply for listing because they are just in the business development stage.


Engage industrial trends, respond to policies and support innovative industries

With the rapid development of technology which accelerates new products and transforms business operation models, many new enterprises with key core technologies and innovation capabilities have become a new driving force for industrial growth in the economy. In recent years, the Executive Yuan has actively promoted various interactive measures, built a friendly start-up environment in all links, and provided services in aspects such as entrepreneurship education, advocating feedback expert consultation, resource chain and global connectivity. The National Development Fund has also set up a NT$5 billion "Venture Capital Angel Fund" and jointly launched the "NT$10 Billion Venture Capital Plan" with six government-held financial holding companies. These are unquestionably meaningful in promoting new venture development.

The capital market mission is to develop the economy, and it cannot be absent from the growth process of new enterprises. Dynamic new ventures with high-quality and good potential need to strengthen their operation and competitiveness and to accelerate their business expansion through the capital market. The Taiwan Stock Exchange has carefully researched and observed worldwide industrial trends, and after more than a year of careful study, launched the TIB to prioritize this new business to be inclusive in national economic development and investment protection. FSC Chairman Huang said that the launch of the innovative new board symbolizes the government's determination to support innovative industries, and can achieve the goal of "strengthening primary market functions to support real economic development" in the capital market roadmap. Chairman Kung of the National Development Council affirmed that this is a groundbreaking moment in Taiwan's capital market in the implementation of the policy goal of "optimizing the investment environment of Taiwan's innovative industries."

The best time to launch the board as the capital market
momentum is high

Despite the uncertainty of COVID-19 over the past year, the domestic economy has been performing against the trend. The capital market has also flourished on a solid basis, and a number of new mechanisms such as continuous trading, intraday odd lot trading and the market making mechanism have been successfully implemented; all these have been highly recognized by market participants, whose investment participation has also increased significantly. Recently, the total market value of the stock market has exceeded NT$60 trillion, and the average daily turnover has surpassed NT$600 billion. With the growing scale of the capital market and high capital momentum, the moment is now to launch the TIB.

TIB takes the first step and steadily makes adjustments to meet market demand

The TIB is the cradle for the growth and enhancing new ventures, revising previous mindset of screening mature enterprises and tailoring different listing standards according to the characteristics of new ventures. The listing standards emphasize key core technologies and development potential of the companies while simultaneously requiring full disclosure of significant information, so that investors can fully perceive the actual operating condition of the companies and render reasonable evaluations. This is also the reason why the TIB listing requirement of "market value" reflects the investment value of comprehensive growth and risk. This is jointly determined by all investors in the capital market and is globally positioned with international practices. Given the inherent risk of such investments, only professional institutional investors with high risk-taking experience and high net worth natural person investors are allowed to participate in the trading.

For the current mechanism, considerably study and feedback from major international securities markets and throughout Taiwan were sought. This all lead to a feasible scheme being formed and the Taiwan Stock Exchange conducting rolling reviews and adjustments based on the actual implementation results, so as to meet the market demand.

At the opening ceremony, Premier Su expressed the expectation that the long and painstaking journey of the new ventures and the capital market can be shortened through relaxation and deregulation of relevant regulations; he also encouraged relevant units to work together for the betterment of economic environment. Just as Premier Su said, the capital market must jointly undertake the responsibility of supporting the development of new ventures, which must cultivate their future operations and manage growth after listing. They can depend on the TWSE and intermediaries to foster their expansion, continue to give guidance and assistance to drive them to grow steadily and healthily. The launch of the TIB expands available financial channels for new ventures, accelerates their growth, widens the investment targets of professional investors and improves the competitiveness of intermediaries. This concerted efforts by all market participants to achieve a win-win situation reflects the desired common good and prosperity for all.

For further information, please contact Ms. Kao at