Trouble in Taiwan's structured notes market
The reopening of the Taiwan structured notes market in March 2010 saw a flurry of new deals, despite tough new product approval rules. Now the product approval process has ground to a halt, with approval decisions said to be erratic and politically motivated
Taiwan was once the testing ground for structured products in Asia and the market swelled to $28 billion by the second quarter of 2008, according to the Trust Association of ROC (Taroc). But billions of dollars of investor losses later in 2008 – some of which were linked to Lehman Brothers’ capital guaranteed structures – resulted in legislators and regulators closing the market before imposing tough new product approval rules on structured products in August 2009.
The guidelines introduced in
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