The Taiwan Monthly

Trading Policies

Offshore foreign institutional investors permitting the appointment of multiple custodians

To create a friendly investment environment, attract more international capital, and enhance the efficiency of foreign investments in the Taiwan capital market, the Financial Supervisory Commission (“FSC”) has issued a new order allowing offshore foreign institutional investors to appoint more than one custodian institutions. In line with the regulator's policy, the Taiwan Stock Exchange (“TWSE”) has added a new guideline "Operation Directions for Offshore Foreign Institutional Investors to Designate More Than One Custodian Institution," effective from February 24, 2025.

Under the current regulations, offshore overseas Chinese and foreign investors can only appoint one custodian institution. However, in practice, large offshore foreign institutional investors may have different trading teams responsible for transactions or may delegate asset management to various asset management companies. Different traders or managers might appoint different global custodians. Due to the limitation of being allowed to appoint only one custodian institution, global custodians may need to appoint different domestic custodians from different groups or with no existing business relationships, leading to higher resource and cost expenditures.

To create a friendly investment environment and foster a fair, efficient, innovative, open, diversified, and international capital market, the regulator has allowed offshore foreign institutional investors to appoint more than one custodian institution. This move is expected to attract foreign investors to continue holding Taiwanese stocks, increase the international visibility of the market, and enhance market efficiency. The TWSE is fully cooperating by planning the relevant operational processes and system development, as well as adding operational guidelines and amending relevant regulations. Moving forward, we will continue to promote measures to invigorate the stock market, with the goal of attracting more capital to our capital market and boosting economic growth.

For further inquiries, please contact Chien-Ti Chang at chienti@twse.com.tw