According to the Taiwan Stock Exchange, the number of listed companies grew from 382 in 1996 to 790 in 2011, reflecting an explosive growth （more than doubled ）in 15 years. However in recent years, the increase of the number of listed firms has slowed down in the new listing, As the exchanges and securities firms have changed their focus to the Taiwan Depositary Receipts （TDR）and the warrant market in particular .After the hedge tax problem has been resolved, the exchanges release a variety of products related to the warrant market as the issuance regulations are modified. In 2011, the number of warrants reached 13,806, while the trading value of listed warrants accounted for the proportion of the stocks transaction value has reached 1.05%。
The largest warrant market is in Hong Kong, which is more than 20% of the total market trading value in 2010 and 2012, but the total number of issued warrants was only 5,000 to 6,000 units. Compared with Taiwan, there exists an imbalance in the warrants market between the primary and the secondary trading market. Beginning from 2009, the warrant issuers regulation was modified, and the liquidity providers（market maker）system was set. Consequently exchanges and the securities firms diligently promoted the warrant products. In 2011and 2012, the number of warrants issued exceeded 10,000 units. Even though the warrants transaction amount has improved significantly, the ratio of the stock market trading value remains of 1.05%, indicating there is still room for growth thought proper regulation and marketing.
The thesis focuses on what the warrants market in Taiwan can learn from the warrants market in Hong Kong in the aspect of the regulation and market. By comparing the warrants market between the two countries, I propose the following recommendations .First, increase the product varieties. Second, reconsider the total cash settlement policy and abolish the total amount issued of control. Third, relax government regulation on foreign investment limit with the introduction of a guarantor system. Finally, diminish the market restrictions. Hopefully, this will significantly increase Taiwan’s warrants market trading volume.