Taiwan's top financial regulator said on Wednesday it plans to let local brokerages invest in their Chinese counterparts via offshore channels, in another sign of improving business ties with China.
"Such investments primarily will be done via Hong Kong, as Taiwan brokerages already have 10-20 subsidiaries there," Susan Chang, vice chairwoman of the Financial Supervision Commission (FSC), told Reuters by telephone.
"It is possible to see that happening in one month," Chang said, without giving further details.
The plan is part of a broader series of efforts to improve Taiwan's economy through closer business ties with China under the new administration of President Ma Ying-jeou, whose Nationalist Party favours better relations with Beijing.
The news helped to push up shares of some sector leaders, which outperformed the broader market.
In midday trading, Capital Securities was 1.5 percent higher and Polaris Securities rose 2.1 percent, beating a 0.5 percent gain in the main index.
Capital's president K.C. Chou said last month his firm was interested in entering the Chinese market, upon approval from Taiwan regulators.
Other plans in that series included allowing exchange-traded funds (ETFs) launched by Taiwan's and China's fund management firms to trade in each other's markets.
The FSC also planned to raise the amount of assets that Taiwan mutual funds can invest in China stocks.
"It is likely to work it out and see the result in one month," the vice chairwoman said.
Currently, Taiwan's onshore funds -- with an estimated T$2.2 trillion ($73 billion) under management -- can put up to 0.4 percent of their assets in mainland-listed shares, and as much as a combined 10 percent in Hong Kong-listed H-shares and red-chip shares.