(AAM)

Taiwan’s Fubon Asset Management (Fubon AM) is set to launch the island state’s first corporate governance (CG) exchange-traded fund (ETF) upon being awarded the TWSE Corporate Governance 100 Index (CG 100 Index) licence from the Taiwan Index Plus Corporation (TIP), a wholly-owned subsidiary of the Taiwan Stock Exchange (TWSE).

The CG 100 Index was launched by the TWSE in June 2015 as a means of supporting the Taiwanese government’s policy on encouraging corporations to comply with good practices. The main criterion to be eligible for inclusion into the CG 100 Index is a score in the top 20% of the Corporate Governance Evaluation System, which assesses a corporation’s implementation of CG based on a set of evaluation indicators.   

Having received the CG 100 Index licence from TIP, Fubon AM will now have to seek approval from the Securities and Futures Bureau of the Financial Supervisory Commission to carry out fundraising, essentially enabling Fubon AM to launch the ETF by late 2016.

The granting of the CG 100 Index licence comes four months after TIP had licensed the Finance Leveraged 2X Index and the Finance Inverse -1X Index to Yuanta Securities Investment Trust Company (Yuanta SITC) in March; Yuanta SITC, however, has yet to launch the related ETFs.

The TWSE and its subsidiary have increasingly placed emphasis on socially responsible investing (SRI) over the past few years, having launched the Taiwan Employment Creation 99 Index and the Taiwan High Compensation 100 Index in 2010 and 2014, respectively.

Shin-Chung Chen, president of TIP, had previously told Asia Asset Management that the two indices were licensed to pension funds for investment mandates, noting that their attributes included recognising the companies that are best at fulfilling corporate social responsibilities while simultaneously producing excess returns above market. He added that the TWSE would be more committed towards the promotion of SRI going forward.

Source:

https://www.asiaasset.com/news/TIP_CH0607_FS_DM.aspx