TAIPEI, May 21 - Taiwan's central bank plans to require foreign investors receiving U.S. dollar-denominated dividends from listed local companies, including Taiwan Semiconductor Manufacturing Co (TSMC), to adhere to a single currency election and avoid frequent switching, three sources familiar with the matter said.
Under the approach currently favored by authorities, investors would be permitted to change their currency selection only once a year. The aim, according to the sources, is to limit repeated toggling between currencies while allowing some flexibility on an annual basis.
Key procedural and timing details from the sources include:
- In April, Taiwan's Financial Supervisory Commission announced that listed local companies could begin distributing foreign-currency-denominated dividends to foreign shareholders.
- Foreign custodian banks told the sources they are willing to cooperate with new procedures for U.S. dollar dividend payouts on Taiwan stocks.
- One source, speaking on condition of anonymity because they were not authorized to speak publicly, said an annual option to alter the currency selection would be acceptable, but emphasised that changes should not be made too frequently.
The move would apply to U.S. dollar-denominated dividend payments from companies such as TSMC, which has paid quarterly cash dividends since 2019, distributing dividends four times a year.
Because foreign custodian banks will need time to develop and test the technical infrastructures required to process foreign-currency dividend payouts, the actual rollout of these payments is expected to begin next year, the sources said.
An official response from Taiwan's central bank and from TSMC was not immediately available.
This plan, as described by the sources, seeks to balance investor choice over dividend currency with operational stability in processing foreign-currency distributions. The annual-change limit appears to be the compromise currently under consideration by the authorities.
Note: The information above is based on reporting from three sources familiar with the matter. Where personnel spoke on background, they did so because they were not authorised to comment publicly.