The Taiwan Stock Exchange has launched a new wholly-owned subsidiary, Taiwan Index Plus (TIP), which will run the exchange’s index businesses. TIP will include the development of new investable products and the maintenance of existing indices. It will also develop the exchange’s business by licensing current and future indices for the creation of investment products such as exchange-traded funds.
The establishment of Taiwan Index Plus, a business unit created solely for the development and maintenance of indices, is expected to streamline and enhance Taiwan Stock Exchange’s indexing businesses.
Existing indices which will continue to be maintained by TIP include the benchmark TAIEX series, which tracks the market cap-weighted performance of all large cap companies listed on the Taiwan Stock Exchange, as well as a range of indices co-compiled with the likes of FTSE, Research Affiliates, and S&P Dow Jones Indices.
TIP will also be accountable for licensing and marketing indices on the international stage, a key strategy for enhancing the profile of the exchange and Taiwan’s capital markets in general.
Sush-der Lee, Chairman of the Taiwan Stock Exchange, said in a statement: “The establishment of a professional index company in Taiwan will help us better meet the growing global demand for index investments – an $11tn market. In addition to providing a wide range of index services, information services, and innovative products for Taiwan’s capital markets, (Taiwan Index Plus) will also promote international connections and cooperation between Taiwan and global markets, while further stimulating the development of Taiwan’s capital market.”
Shin-chung Chen, CEO of Taiwan Index Plus, added: “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.”
The separation of the exchange’s indexing capabilities into its own business unit is the latest move in a series of progressions that will boost the country’s ETF markets. Other developments include the rolling out of inverse and leveraged ETFs in the country; the launch of commodity ETPs especially oil-based products; the signing of a memorandum of understanding in December 2015 between the Taiwanese and South Korean stock exchanges to work towards the integration of their ETF markets; and a greater degree of collaboration with leading index providers such as Stoxx to provide local investors with the opportunity to better access European equity markets through the ETF structure.