Taiwan FSC to Allow Investment-Grade Foreign Bonds as Loan Collateral

Non-purpose loans allow investors to borrow from securities firms against eligible assets without restrictions on how the funds are used. Taiwan’s Financial Supervisory Commission is expanding the range of eligible collateral, allowing relatively illiquid foreign bonds to be converted into working capital. The change could give investors greater flexibility in managing their assets and enhance securities firms’ competitiveness as one-stop financial-service providers.

The FSC recently announced that foreign bonds rated investment grade or higher will be accepted as collateral for non-purpose loans from securities firms, with implementation expected in the third quarter of 2026. Reports estimate that the policy could channel about NT$300 billion into Taiwan’s capital markets. Detailed eligibility criteria and operating rules have yet to be announced by the regulator.