Taiwan inks financial MOU with mainland

The chairman of Taiwan's Financial Supervisory Commission, Sean Chen, speaks in Taipei County yesterday. Taiwan has signed a financial service pact with the Chinese mainland, which paves the way for cross-investments, a source said yesterday.

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TAIWAN said it signed a long-anticipated memorandum of understanding with China's mainland yesterday allowing banks, securities and insurance firms to conduct business in each other's market for the first time.

The agreement came seven months after the two sides signed a deal on the exchange of financial operations during their regular high-level negotiations on economic ties.

Taiwan's Financial Supervisory Commission said it signed the documents yesterday with related mainland agencies overseeing banks, and securities and insurance businesses.

Under the MOU, the supervisory agencies of the mainland and Taiwan can dispatch officials to audit and oversee operations of financial institutions on the other side's market, according to a FSC statement.

The deal will take effect in two months. Taiwan and the mainland have also agreed to exchange financial data needed for the approval of acquisitions, mergers and other activities, it said.

Taiwan officials have said the terms of the pact are subject to further talks when the two sides meet to discuss a wide-ranging free trade pact. No date is set but Taiwan says it hopes the trade deal can be signed by next spring.

The mainland imposes stringent terms on overseas financial institutions, and a Taiwan bank would have to wait at least three years before being allowed to take deposits and extend loans in yuan, the mainland's currency.

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