MIAX Expands to Taiwan

Terry Flanagan

Taiwan Stock Exchange (TWSE) has signed a Memorandum of Understanding with MIAX Options Exchange to foster mutual cooperation and information exchange.

The MIAX Options Exchange was approved by the U.S. Securities and Exchange Commission on December 3, 2012, becoming the nation’s eleventh options exchange.

The signing of the MOU will enable U.S. ETF issuers to launch options on MIAX which track ETFs linked to TWSE listed stocks, improve international links to the Taiwan capital market, and encourage more investors to trade Taiwan securities.

TWSE has previously signed MOUs with NYSE Euronext, NASDAQ-OMX Exchange, BATS Exchange and Hong Kong Stock Exchange to obtain information on securities issued overseas by TWSE listed companies, as well as overseas ETFs linked to TWSE securities.

In mid-August 2009, TWSE cooperated with Hong Kong Stock Exchange (HKEx) to introduce 3 dual-listed ETFs in Taiwan in the form of either Offshore ETFs and Feeder Fund ETFs.

“Globalization has been a constant feature of the international capital market and has led to the rise of cross-border trading platforms, as well as cross-border ETF listings and products,” said Lee Sush-Der, chairman of TWSE.

A number of emerging markets have arisen in recent years and have quickly become an important part of the global economy, increasing the range of new products demanded by investors.

“We will continue to reinforce our cooperation with exchanges in emerging markets, such as Shanghai and Shenzhen,” Lee said. “We will also further diversify our products and the promotion of the Taiwan capital market, while protecting investors and maintaining a fair trading environment to support trading volumes and boost the economy.”

Separately, MIAX is implementing an equity rights program for Exchange members, by which participating exchange members would be issued units representing the right to acquire equity in the MIAX’s parent holding company in exchange for a cash payment and the achievement of certain volume thresholds on the Exchange over a 23 month period.

The purpose of the program is to promote the long-term interests of MIAX by providing incentives designed to encourage MIAX market participants to contribute to the growth and success of MIAX, by being active liquidity providers and takers to provide enhanced levels of trading volume to MIAX’s market, through an opportunity to increase their proprietary interests in MIAX’s enterprise value.

“As of today, a number of exchange members have expressed strong interest in participating in the program. In addition, the program is open to all MIAX market participants generally,” said Thomas Gallagher, MIAX’s chairman and CEO. “The implementation of this program is part of the exchange’s overall business strategy to create a compelling trading venue and increase its market share in the U.S. equity options space. We are looking forward to the completion of this next major milestone in the development of MIAX as the exchange approaches its 4th operating quarter since launch in December 2012.”

The exchange plans on commencing the measurement period for the volume thresholds on September 3, 2013. Participation in the program is open to all members of the exchange, subject to their satisfaction of eligibility requirements.

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