New rules to curb Taiwan insurer bond ETF investing
The island's insurers have increasingly invested into the assets, but this will likely hit a plateau as the local regulator introduces an additional capital charge for currency risks.
Taiwan insurers have had a growing appetite for bond exchange-traded funds (ETFs), courtesy of a quirk in local rules, but the island’s financial regulator has imposed a higher risk charge on the assets to reduce this hunger.
Taiwanese insurers investing into bond ETFs that track an overseas index will find their allocations subject to a 6.61% foreign currency risk charge, the Financial Supervisory Commission (FSC) said last week.
That comes on top of risk charges of 6.33% and…
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