The Taiwan OTC Exchange (TWO): Definition, Function, and Market Impact
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Summary:
The Taiwan OTC Exchange (TWO) serves as an alternative securities exchange in Taiwan, providing a platform for companies to list their securities with lower criteria compared to the Taiwan Stock Exchange (TWSE). This article delves into the history, function, and significance of the Taiwan OTC Exchange, elucidating its role in facilitating capital raising for local enterprises and its contributions to economic development.
What is the Taiwan OTC exchange (TWO)? Example & how it’s Used
The Taiwan OTC Exchange (TWO) is a financial platform in Taiwan offering an alternative to the more stringent listing requirements of the Taiwan Stock Exchange (TWSE). It provides companies, especially those in their initial public offering (IPO) stage, with an avenue to list their securities and raise capital.
Understanding the Taiwan OTC exchange (TWO)
Formerly known as the Gre Tai Securities Market (GTSM), the Taiwan OTC Exchange (TWO) is now managed by the Taipei Exchange (TPEx). Established in November 1994, TPEx is headquartered in Taipei City’s Zhongzheng District and primarily oversees over-the-counter (OTC) bond trading in Taiwan.
TPEx facilitates trading in various financial instruments, including stocks, bonds (government, convertible, and international), and derivatives. Its objectives include promoting economic development, supporting government policies, and providing financial products and services to the international market.
History of the TPEx
Over-the-counter (OTC) trading in Taiwan traces its origins back to February 1988, under the management of the Taipei Securities Dealers Association. Recognizing the need for a more robust capital market, the Ministry of Finance (MOF) established an OTC center in 1993, which later evolved into TPEx in November 1994, following the Securities and Exchange Act.
The TPEx today
Today, TPEx plays a crucial role in fostering emerging industries, high-tech sectors, small and medium-sized enterprises, and micro-enterprises. It facilitates capital raising and market access through centralized trading and over-the-counter negotiated trading.
Trading sessions on the Taiwan OTC Exchange operate from 9 a.m. to 3 p.m., with post-market sessions from 1:40 p.m. to 2:30 p.m., excluding Saturdays, Sundays, and holidays.
Frequently asked questions
What are the benefits of listing on the Taiwan OTC exchange?
Listing on the Taiwan OTC Exchange offers companies a platform to raise capital with lower listing requirements compared to the Taiwan Stock Exchange (TWSE). It provides access to investors and facilitates market participation for emerging industries and smaller enterprises.
How does the Taiwan OTC exchange contribute to economic development?
The Taiwan OTC Exchange (TWO) plays a vital role in economic development by providing a platform for capital raising and market participation. It supports government policies, fosters the growth of local enterprises, and enhances market liquidity.
Are there any drawbacks to listing on the Taiwan OTC exchange?
One potential drawback of listing on the Taiwan OTC Exchange is the lower visibility and liquidity compared to the Taiwan Stock Exchange (TWSE). Companies may also face challenges in attracting institutional investors and may experience limited analyst coverage.
Key takeaways
- The Taiwan OTC Exchange (TWO) provides an alternative platform for securities trading with lower listing requirements.
- The Taipei Exchange (TPEx) oversees over-the-counter (OTC) bond trading in Taiwan and promotes economic development.
- TPEx facilitates trading in stocks, bonds, and derivatives, contributing to capital raising and market access for local enterprises.
- Listing on the Taiwan OTC Exchange offers benefits such as access to capital for emerging industries but may come with drawbacks such as lower visibility and liquidity.
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