Taiwan removes uptick rule
28 September 2015 Taipei
Image: Shutterstock
The four-week uptick rule in Taiwan was lifted last week after renewed market stability.
Taiwan’s Financial Supervisory Commission has prohibited the short selling of Taiwanese shares for less than the previous trading day’s closing price since 24 August.
There was a 1.8 percent drop in market value immediately after the uptick rule was removed on 21 September, according to SunGard’s Astec Analytics.
Balances on loan also decreased by around 5 percent follow the rule’s repeal.
Borrowing volumes dipped to within a few percent of their 12-month low on the day the rule was applied and rose to around 90 percent of the 12-month peak over the following two weeks, despite the uptick rule being in place, according to SunGard.
A recovery of Taiwan’s benchmark index along with the US Federal Reserve’s decision to maintain current interest rates and a general unwillingness by the new government in Taipei to maintain restrictive market conditions were cited as key reasons for the rule’s removal.
Taiwan’s Financial Supervisory Commission has prohibited the short selling of Taiwanese shares for less than the previous trading day’s closing price since 24 August.
There was a 1.8 percent drop in market value immediately after the uptick rule was removed on 21 September, according to SunGard’s Astec Analytics.
Balances on loan also decreased by around 5 percent follow the rule’s repeal.
Borrowing volumes dipped to within a few percent of their 12-month low on the day the rule was applied and rose to around 90 percent of the 12-month peak over the following two weeks, despite the uptick rule being in place, according to SunGard.
A recovery of Taiwan’s benchmark index along with the US Federal Reserve’s decision to maintain current interest rates and a general unwillingness by the new government in Taipei to maintain restrictive market conditions were cited as key reasons for the rule’s removal.
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