outlook special report business highlights financial
TRANSCRIPT
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OUTLOOK • TDCC Chairman Voices Taiwan’s Perspective on
Corporate Governance to Leading Pension Experts
SPECIAL REPORT • TDCC was at the OECD Asian Roundtable on
Corporate Governance
• TDCC Successfully Establishes “Investor Services” Task
Force at ACG Annual General Meeting
BUSINESS HIGHLIGHTS • TDCC ePassbook 2.0 Launched
• Digitalization of Commercial Paper Issuance Documents
Goes Live; Market Efficiency Rapidly Improves
FINANCIAL TECHNOLOGY • Company Transparency Platform is Officially Online
STATISTICS
STOCK MUSEUM • Panoramic View and AR Experience Now Available on
Website of Taiwan Securities and Futures Virtual Museum
GALLERY
2018 WIN
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TDCC Chairman Voices Taiwan’s Perspective on Corporate Governance to
Leading Pension ExpertsTo recognize Taiwan’s significant achievement of 100% electronic-voting capability for
shareholder meetings, J.P. Morgan invited TDCC Chairman & CEO, Mr. Sherman Lin, to serve
as a panelist at its 9th Annual Multinational Pensions Forum in Paris, France on October 11th
of this year. Mr. Lin was the first speaker from Taiwan since the establishment of the forum.
Mr. Lin shared Taiwan’s experience in corporate governance with leading global institutional
investors on a panel titled “What Does Success Look Like in Achieving Good Governance?”
Mr. Lin shared Taiwan’s experience on the important factors of good governance, and
how TDCC utilizes Fintech to enhance governance. He spoke about Taiwan’s progress in
corporate governance over the past 10 years, highlighting 100% voting by poll, and the high
adoption rate of a candidate nomination system.
J.P. Morgan’s 9th Annual Multinational Pensions Forum addressed the numerous challenges
faced by pension funds through case studies that demonstrated global best practices in
delivering defined benefit and defined contribution provisions. The forum was attended by 60
pension management entities across 11 countries from Europe, North America and Asia. The
participants included public and corporate pension managers responsible for approximately
USD 1 Trillion in assets under management. The forum covered regulatory developments, the
impact of technology, and the role of sustainable investments related to the pension segment.
Mr. Lin discussed how in recent years Environmental Social Governance (ESG) and
Corporate Social Responsibility (CSR) have become important decision-making factors
of investment for long-term global institutional investors such as pension funds and asset
managers. Issuers in Taiwan need to be aware of the growing importance of ESG and
CSR. To fulfill Taiwan’s new corporate governance roadmap and support Taiwan issuers,
TDCC plans to cooperate with global proxy voting research institutions to launch an Investor
Relation Platform. This platform will provide issuers and investors with corporate governance
and ESG ratings. Issuers will be able
to review their own ESG and corporate
governance performance, and institutional
investors can easily access companies’
information via the platform. TDCC aims
to improve the quality of communication
between issuers and investors as well as
expand the visibility of Taiwan’s market in
the global investment community.
2
TDCC was at the OECD Asian Roundtable on Corporate Governance
The 2018 OECD Asian Roundtable on Corporate Governance took place on 7-8 November in
Kuala Lumpur, Malaysia. Both Taiwan Stock Exchange Corporation (TWSE) and Taiwan Depository
and Clearing Corporation (TDCC), headed by the Securities and Futures Bureau, Financial
Supervisory Commission R.O.C. (Taiwan), participated. TDCC Chairman & CEO, Mr. Sherman Lin,
was amongst the invited panelists in the panel discussion ‘The use of flexibility and proportionality
in corporate governance frameworks’.
The OECD panel emphasized the versatilities
in ‘The use of flexibility and proportionality
in corporate governance frameworks’; one
size doesn’t f i t al l , the regulations must
be programmed according to the unique
characteristics of individual markets and the
objects, with flexibility and proportionality, in
order to obtain a harmonic balance in improving
market transparency, perpetuating market
integrity and contemplating cost efficiency.
Participants of the panel discussion shared the uniqueness in local corporate governances in Japan,
Hong Kong, Singapore and Taiwan, and the use of flexibility and proportionality. TDCC Chairman &
CEO, Mr. Sherman Lin, shared the outstanding success of TDCC under the ‘Corporate Governance
Blueprint’ from the Financial Supervisory Commission. Mr. Lin also elaborated on the regulations on
independent directors, E-voting and the data of shareholders’ meetings in an alternative language,
namely English. Furthermore, Mr. Lin addressed on how the progressive measures were effectively
implemented in correspondence to various capitals of companies, different classifications and diverse
foreign shareholding ratios as well as how the innovative technologies were instrumented in the
constructions of adequate servicing platforms. Therefore, the overall compliance cost can be reduced
while the market transparency and integrity can be elevated.
During the panel discussion, the Corporate Governance Committee of OECD also pointed out
that the global market is facing a trend of ‘Increase in Institutional Ownership’; there is a growing
force affecting corporate governance of the issuing corporates coming for the institutional
shareholders. Because of this, in addition to assisting in promoting institutional investors’ regulation
compliances, TDCC is activating a dual-language ‘Integrated Investor Relations Platform’ in 2019,
in coordination with the advanced ‘Corporate Governance Blueprint’, with the aim of bettering the
quality information transfers between the issuing corporates and shareholders, hence the improved
convenience information searches for the investors. Thus, the communications between the
issuing corporates and investors can be strengthened; meanwhile, the global visibility of the Taiwan
markets can be further enhanced.
Special Report
3
TDCC Successfully Establishes “Investor Services” Task Force at ACG Annual General Meeting
After elected as the executive committee member of Asia-Pacific CSD Group (ACG) in 2016,
TDCC actively conducted the exchange and cooperation among global CSDs. On November
26, Chairman and CEO, Mr. Sherman Lin led delegation to attend the 22nd ACG Annual
General Meeting in Sri Lanka, proposing to set up “Investor Services” task force. With the
support of the attendees, the task force was successfully established.
Investor Services have been global CSDs’ development direct ion during business
transformation. How to conduct cross-industrial cooperation through innovative technology,
offer diversified channels to investors for their own account management and information
access, and provide investors with more convenient services are all major tasks for global CSD
business development.
In the past years, TDCC has been offering quality and innovative investor services to the
market such as e-voting, TDCC ePassbook and Fundrich. Through the establishment of the
task force, TDCC hopes to share with ACG members the company’s business development
in B2B as well as B2B2C and experiences in the use of financial technology. In addition,
TDCC will take into consideration members’ opinions and ideas as references for future
business planning and employ the task force as an exchange platform of members’ business
development experience.
According to Mr. Lin, TDCC has been developing diversified businesses; through the formation
of the task force, TDCC expects to promote more communication on CSDs’ operation of
investor services, information exchange, and international cooperation. Through the sharing of
experience and pursuit of mutual benefits, collaborative development among Asia-Pacific CSDs
can be facilitated.
Special Report
4
TDCC ePassbook 2.0 Launched
Business Highlights
For over a year, there have been over 400,000 accounts
successfully activated through TDCC ePassbook since it went
live, and its 2.0 version has already launched on November 12th.
The press conference was held on November 19th, 2018. The
competent authorities, brokerage representatives and media
reporters were invited to experience new functions with lively
ambiance.
The new version delivers four major functions; first, graphical
display of integrated assets, which integrates investor’s assets
in each passbook and shows the integrated assets in diagram.
Second, cloud trading statements take away investors’ worry of losing transaction details after
they got new smart phones. Third, customized push notifications target at events that investors
have the rights to participate in. Last, “e-STOCKSEARCH” provides thorough market material
information, including shareholder meetings, ex-right and ex-dividend. All these functions
provide investors with more productive ways of asset and equity management.
5
Business Highlights
Digitalization of Commercial Paper Issuance Documents Goes Live;
Market Efficiency Rapidly ImprovesWith the trend of financial technology, inclusive of open intelligent platform, big data marketing, and
AI, TDCC has been constantly conducting digital transformation, realizing platform vision through
innovative thinking and launching a variety of digitalized services in bills market.
Since TDCC successfully launched dematerialized issuance of commercial paper in September
2017, there have been over three thousand issuers opening issuance registration accounts with
TDCC. After launching the service, the improvement of operation efficiency and the elimination of
risk of loss and damage are highly appreciated by the market participants. The issuance volume
has been increasing since launch of the service; over NT$ 14.4 trillion commercial papers were
issued until the end of October in 2018. To further develop the idea of platform economy and
extend efficacy of existing platform, TDCC has been actively planning the construction of B2B2B
platform, providing bills primary market with value-added services for digitalization of issuance
documents so that issuers, guarantors, and bills finance companies can transmit issuance
documents electronically through TDCC’s platform. The service removes the inconveniences of
physical document delivery among multiple parties, significantly improves efficiency, and reduces
bills finance companies’ cost of manual delivery.
The digitalization of commercial paper issuance documents, which went live on October 29th 2018,
connects many-to-many information flows among issuers, guarantors, and bills finance companies.
Through the vision of platform economy, the forty-year plus bills market operation mode has been
transformed into a digital model which guarantees a safer, more convenient, and more efficient
financing environment , which has always been and will always be TDCC‘s commitment for
Taiwan’s bills market.
1. Bills finance company delivers
transaction statement
2. Issuer agrees with transaction statement
3. Issuer confirms registration
command and underwriting agreement4. Guarantor
confirms guarantee command
6. TDCC completes issuance
registration
5. Bills finance company transmits
registration command
One click to complete commercial paper issuance documents delivery
6
Financial Technology
Company Transparency Platform is Officially Online
In order to strengthen anti-money
laundering and increase corporate
transparency, the Ministry of Economic
Affairs revised the Article 22-1 of
Company Act, and assigned TDCC
on August 31, 2018, to request the
build-out of a Company Transparency
Platform (CTP) for the implementation
of the new law. The platform portal is
now available at https://ctp.tdcc.com.tw.
As 690,000 companies will be required
to file information about their directors, supervisors, managerial officers, and major shareholders
when the new law comes into effect, TDCC believes it is important that the CTP can perform ID
verification and data processing online for first-time users in a timely manner. As such, the CTP
features:
1. Multiple log-in options:
CTP users are required to go through ID verification before making a filing. This process can be
done by simply inserting a conventional corporate certificate, certificate issued by a securities or
futures brokerage, or natural person certificate into a card reader. For users who do not have a
card reader, they only need to provide their health insurance IC card numbers to verify.
2. Made-easy filing:
CTP is linked to the databases of both the Ministry of Economic Affairs and the Ministry of
Finance, so it already has the general and taxation information of all registered companies. CTP
users only need to confirm existing information and fill in the blanks after logging in. There is no
need to start from scratch.
3. Twenty-four seven services:
Using the responsive webpage design (RWD), CTP is open 24 hours a day. It means users can
complete the filing anytime, anywhere via a PC or mobile device.
CTP has been launched on November 1, 2018, and has since run smoothly. Companies are
required to complete their first filing before January 31, 2019. As of November 27, 2018, a total of
121,594 companies have made their filings online. TDCC has organized several presentations and
put the “How to Use” information on the CTP portal website to make sure companies know about
the new law and filing procedure.
7
Statistics
1,135
1,174
1,167
39.89
41.30
36.80
36.91
1,998 2,0422,132
34
35
36
37
38
39
40
41
42
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
TWSE TPEx Emerging Stocks
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
CP2/CP1/BA NCD
Equities in Custody(Shares)
Equities in Custody(Market Capitalization)
Book-Entry Operations(Shares)
Short-TermBills in Custody
Billion Shares
Trillion NT$
Million Shares
Billion NT$
1,100
1,110
1,120
1,130
1,140
1,150
1,160
1,170
1,180
2017.10 11 12 2018.1 2 3 4 5 6 7 8 9 10 11 12
2017.10 11 12 2018.1 2 3 4 5 6 7 8 9 10 11 12
2017.10 11 12 2018.1 2 3 4 5 6 7 8 9 10 11 12
2017.10 11 12 2018.1 2 3 4 5 6 7 8 9 10 11 12
101,406
83,842
151,561
87,133
32,00118,046
40,523
19,725
430 329 486 286
8
Statistics
2,038
1,576
2,399
1,856
1,345 1,276
1,739 1,645
54 49 51
29 34 34
948,247
1,157,502
3,500
5,284
1,736 1,710
599 706 707 601
Outright Purchases / Sells Repo
Secondary MarketClearing & Settlement of
Short-Term Bills
Offshore Fund Operations
Offshore Fund Subscriptions
Registration ofDematerialized
Securities
Billion NT$
Accounts
Master Agents Distributors Investor Accounts
Systematic Investment PlanOne-time Investment
Million NT$
■
■
■
■
■
■
21,28578%
2,1048%
8713% 2,030
7%
209 1%
911 3%
No. of Issuance
0
500
1,000
1,500
2,000
2,500
3,000
0
200,000
100,000
400,000
300,000
600,000
500,000
700,000
900,000
800,000
1,200,000
1,100,000
1,000,000
0
10
20
30
40
50
60
70
80
0
1,000
2,000
3,000
4,000
5,000
6,000
Warrants
Stocks
Bene�ciary Certi�cates
Corporate Bonds/Bank Debentures
Convertible Bonds
Others
2017.10 11 12 2018.1 2 3 4 5 6 7 8 9 10 11 12
2017.10 11 12 2018.1 2 3 4 5 6 7 8 9 10 11 12
2017.10 11 12 2018.1 2 3 4 5 6 7 8 9 10 11 12
9
Panoramic View and AR Experience Now Available on Website of
Taiwan Securities and Futures Virtual MuseumTDCC incorporated augmented reality (AR) technologies and 360。 panoramic photography to
present the exhibits in the Taiwan Stock Museum. Visitors can now see precious items, such as
the very first stock certificates in the world and Taiwan, and the stock with the highest face value,
via the official website of the Taiwan Securities and Futures Virtual Museum for brand new digital
experience.
Interactive AR films and cameras are available in all the exhibition halls of the Taiwan Stock
Museum for both online and offline visitors to take photos and share with friends at home and
abroad in an instantaneous fashion.
The use of technology at the Taiwan Stock Museum allows visitors to access the museum via PC
and a mobile device, such as handset and tablet, without the constraint of time and space. By
visiting the “360。 Online Stock Museum” at the Taiwan Securities and Futures Virtual Museum,
people who cannot make it to the physical museum will also get to see the exhibits on display
and experience the latest financial technology.
Here is the link to the Taiwan Securities and Futures Virtual Museum: https://www.tsfvm.com.tw/
web/index.aspx
Stock Museum
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Gallery
10
T h e 2 9 t h a n n i v e r s a r y celebration fair of TDCC’s establishment, Chairman & CEO Mr. Sherman Lin (4th from left), and President Mr. Ching-Li Meng (4th from right), donated a charity fund to 6 non-profit social welfare organizations on behalf of the company on November 17, 2018.
TDCC Chairman & CEO Mr. Sherman Lin (middle) and President Mr. Ching-Li Meng (4th from right) welcomed the business visit from KSD Chairman & CEO Mr. Lee Byungrhae (4th from left), and exchanged view on the implementation and promot ion o f ACG "Investor Services" Task Force on December 13, 2018.
TDCC Chairman & CEO Mr. Sherman Lin (4th from right) met with the head of Asia for Citibank Direct Custody and Clearing Mr. Aashish Mishra (4th from left), and shared experience on recent business development of both sides on November 14, 2018.