Direct foreign investment in Taiwan’s booming stock...

Direct foreign investment in Taiwan’s booming stock market is still years away, blocked by the fast pace of the island’s financial success, according to a senior regulatory official.

Lu Tung-ying, vice chairman of the Securities and Exchange Commission, said regulation of the securities industry had to catch up with the rapid growth of the market before foreigners could be allowed in.

“I don’t quite dare to say it will be within three years,” Lu said.

Currently the only way foreigners can legally invest in Taiwan is to join one of four funds. Its stock market has been among the world’s strongest in recent years. The main market index recently has flirted with the 10,000 level, compared to 5,199 at the end of 1988.

Lu said the government realized that a further opening of the market was needed before Taiwan could become an international financial center, something that senior government officials say is their goal.

“We want very much to be an international market, and we are working very hard to set up systems so our reputation as a jungle market or as a bubble market is erased,” Lu said.