The Taiwan Stock Exchange and the South Korean Exchange will sign a memorandum of understanding (MoU) to combine their exchange-traded funds (ETF) markets.
The two exchanges will also seek to jointly compile indices, conduct market promotion activities and engage in bilateral visits to share experiences.
The MoU will be signed on 11 December 2015.
It builds on an earlier memorandum signed by the two exchanges in 2000 and is part of an ongoing commitment by the two countries for economic cooperation.
Taiwan’s ETF market has been growing at a fast pace, with total trading value exceeding NTD 1.47 trillion ($44.7 billion) between January and November 2015, equivalent to 7.13 percent of total trading value, compared to just 1.88 percent in 2014.
The exchange also recently launched a number of diverse ETFs that track international markets.
The Korean ETF market has steadily grown and matured since its debut in 2002. The Korean financial authorities announced a development plan for the ETF market in October 2014 based on the deregulation of the listing and management of ETFs in order to further stimulate the ETF market.
The total size of the Korea market recently reached a record high of KRW 21 trillion ($17.7 billion), sixty times the size of the market in 2002.
Currently, more than 200 ETFs are listed on the Korean exchange.
Lee Sush-der, chair of the Taiwan exchange, said: “By focusing on indices and ETFs, this partnership will take advantage of the flourishing investment trend of global indexing. ETFs that track the Korean equity market will soon be available in Taiwan, and similarly, we expect ETFs that track the Taiwanese equity market will be launched on the Korean market in the future.”
Choi Kyungsoo, chair and CEO of Korean exchange, said: “Taiwan and [South] Korea are both ‘Asian Tiger’ economies. Not only do both markets share similar social, economic and cultural development experiences, the industrial structure of both markets also resembles each other.”
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