According to the FSC’s press release on August 31, 2013, the FSC will increase the maximum percentage allowable for a PRC bank’s equity investment in a Taiwan financial institution which is now regulated under the“Regulations Governing the Banking Activity and the Establishment and the Investment by Financial Institutions between the Taiwan Area and the Mainland Area”, in order to comply with the commitments under the Economic Cooperation Framework Agreement (“ECFA”). However, a PRC bank is still prohibited from investing in Taiwan financial institutions through public tender offer. In the future, the FSC plans to relax the restrictions imposed on a PRC bank for its equity investment as follows:
- Percentage of a single PRC bank’s equity investment in a Taiwan listed bank or financial holding company will be increased to 10% (or 15% if including QDII’s investment);
- percentage of a single PRC bank’s equity investment in a Taiwan unlisted bank will be increased to 15%; (3) percentage of a single PRC bank’s equity investment in the subsidiary of a Taiwan financial holding company will be 20%.