Taiwan tightens curbs on short-selling as TAIEX slides
03 October 2022 Taiwan
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The Taiwan securities markets regulator has tightened its rules on short-selling and securities lending.
The move comes as TAIEX, the Taiwan Stock Exchange’s main cap-weighted index, fell almost four per cent, from 13850 on 27 September to 13301 on 30 September, in the face of volatility in global equities markets and the prospect of further interest rate increases from the US Federal Reserve.
This pushed the Taiwan benchmark equities index to its lowest levels for almost two years.
In a bid to contain this slide, the Financial Supervisory Commission limited the volume of intraday securities lending orders to 20 per cent average daily trading volume over the past 30 days, down from the 30 per cent ADTV limit in place previously.
The FSC has reduced the permitted volume of intraday SBL in response to a significant rise in short-selling activity by foreign institutional investors over the preceding nine months, according to a statement by Sam Chang, director-general of Taiwan’s Securities and Futures Bureau, reported in translation in the Taipei Times.
Taiwan imposed a ban on short selling in response to market volatility triggered by the COVID-19 pandemic, introducing this measure on 20 March 2020 and subsequently lifting this restriction in June 2020 as trading conditions stabilised.
The move comes as TAIEX, the Taiwan Stock Exchange’s main cap-weighted index, fell almost four per cent, from 13850 on 27 September to 13301 on 30 September, in the face of volatility in global equities markets and the prospect of further interest rate increases from the US Federal Reserve.
This pushed the Taiwan benchmark equities index to its lowest levels for almost two years.
In a bid to contain this slide, the Financial Supervisory Commission limited the volume of intraday securities lending orders to 20 per cent average daily trading volume over the past 30 days, down from the 30 per cent ADTV limit in place previously.
The FSC has reduced the permitted volume of intraday SBL in response to a significant rise in short-selling activity by foreign institutional investors over the preceding nine months, according to a statement by Sam Chang, director-general of Taiwan’s Securities and Futures Bureau, reported in translation in the Taipei Times.
Taiwan imposed a ban on short selling in response to market volatility triggered by the COVID-19 pandemic, introducing this measure on 20 March 2020 and subsequently lifting this restriction in June 2020 as trading conditions stabilised.
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