Taiwan regulators warn insurers of short selling risk
26 November 2011 Taipei
Image: Shutterstock
Taiwan’s regulators urged insurers to stop lending securities to short sellers, seeking to bolster equities after heavy losses on markets, according to Businessweek (BW).
Although denying media reports of securities lending bans, officials have called insurance companies to remind them that lending stock for short sales may result in the reduction of value of their own stocks, a spokeswoman at the Financial Supervisory Commission (FSC) told BW.
The FSC is trying to stop investors from profiting from declines in markets at a time when surging borrowing costs in the euro region are stoking concern the region’s debt crisis will derail global economic growth.
Earlier, Reuters reported that the FSC has introduced a measure whereby only 20 per cent of a stock's average trading volume in the past 30 sessions could be used for short-selling. Previously, up to three per cent of a company's total outstanding shares could be used.
Although denying media reports of securities lending bans, officials have called insurance companies to remind them that lending stock for short sales may result in the reduction of value of their own stocks, a spokeswoman at the Financial Supervisory Commission (FSC) told BW.
The FSC is trying to stop investors from profiting from declines in markets at a time when surging borrowing costs in the euro region are stoking concern the region’s debt crisis will derail global economic growth.
Earlier, Reuters reported that the FSC has introduced a measure whereby only 20 per cent of a stock's average trading volume in the past 30 sessions could be used for short-selling. Previously, up to three per cent of a company's total outstanding shares could be used.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
