Structured notes reappear in Taiwan's market again.

Taipei, Nov. 2, 2009 (CENS)--The UBS AG Taipei Branch launched in late October structured notes in Taiwan again, marking the first time for the products to reappear in the financial market here since they were forbidden to circulate on the island by Financial Supervisory Commission (FSC) in mid-June of this year due mainly to the fraud scandal caused by the U.S.-based Private Equity Management Group (PEMG), which sold defunct structured notes to Taiwanese investors and made many investors suffer sizable losses.

After constituting new rules on structured notes, the FSC reopened the market for such financial products starting in late August this year while requesting issuers of such notes to set up branches here to guarantee their issuance. However, so far only UBS AG has applied to FSC for floating such notes.

UBS AG is a Switzerland-based, globally leading bank and one of the pioneering foreign banks in Taiwan. Ma Wen-liang, vice president of the bank's Taipei branch, indicated that the structured notes currently issued by UBS AG for sales in Taiwan are designed to be associated with single share listed on foreign stock markets. The purchasers of the notes can get profits if the price of the linked stock goes up, but may lose money from the drop of the stock price.

Ma said that the notes are sold only to professional investors with assets of more than NT$30 million (US$909,090.9), those with single investment of over NT$3 million (US$90,909) or those who have deposits of above NT$15 million (US$454,545.5) in the bank's branch here. Plagued by the PEMG case, Taiwan's structure note market has become quite sluggish and investors have little interest in joining the market again. With this, most banks here, except UBS AG, take a wait-and-see attitude toward the sales of the notes.