Taiwan Stock Exchanges sets up index development offshoot

Source: Taiwan Stock Exchange

The Taiwan Stock Exchange (TWSE) has set up a new wholly-owned subsidiary, Taiwan Index Plus Corporation (TIP), to provide more comprehensive index and information services to investors and to better meet the growing appetite for more innovative financial products.

TIP will take over TWSE’s existing responsibilities for index development, maintenance, licensing and marketing both in Taiwan and in overseas markets. This includes index licensing for use in financial products such as exchange-traded funds (ETFs), index funds, index futures, index options, index warrants, structured products, and other index-based instruments. TIP will also be responsible for maintaining and promoting indices currently available on TWSE, including its benchmark TAIEX series, indices co-compiled with FTSE, Research Affiliates and S&P Dow Jones Indices, as well as its other customized indices.

Moreover, TIP is committed to compiling new innovative indices for the Taiwan market in order to grow and enrich Taiwan’s index investment market and to help investors implement more diversified indexing strategies. These new types of indices may include leveraged and inverse indices, equal-weighted indices, dividend point indices, thematic indices, smart beta indices, and customized indices. TIP will also seek cooperative partnerships with foreign financial services providers and index companies to co-compile indices that meet investors’ demand.

Mr. Sush-der Lee, Chairman of the TWSE, said, “The establishment of a professional index company in Taiwan will help us better meet the growing global demand for index investments - a US$11 trillion market. In addition to providing a wide range of index services, information services, and innovative products for Taiwan's capital markets, TIP will also promote international connections and cooperation between Taiwan and global markets, while further stimulating the development of Taiwan’s capital market.”

Mr. Shin-chung Chen, CEO of TIP, said, “Many other major markets around the world have dedicated index companies that operate either independently or as a joint venture. Having one company dedicated to index services will increase the competitiveness of the Taiwan market in terms of innovation and efficiency. It will also accelerate the development of diversified indices in Taiwan and promote their widespread adoption in domestic and overseas markets.”

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