By Ted Chen / Staff reporterThe Financial Supervisory Commission (FSC) yesterday published draft guidelines that would allow securities brokerages to issue exchange-traded notes (ETNs), paving the way for the instrument to be listed on local bourses before the end of this year. For example, a brokerage could issue an ETN tracking the TAIEX and meet its obligation to investors by profiting from US stocks, it said. However, similar to other debt securities, ETNs carry greater credit risk, as they are only backed by the credit of the underwriting issuers, it added. The commission added that it would evaluate each ETN application based on its risk hedging design and the underwriting brokerage’s investment prospectus. ETNs tracking the strength of the New Taiwan dollar are to be prohibited, it added.

Source: Taipei Times February 27, 2018 16:02 UTC