Taiwan – FSC Short Sale Rules

Taiwan – FSC Short Sale Rules

On 18 March 2020, TAI FSC introduced restrictions on securities borrowing.

  • Total balance of securities borrowing and margin trading shall not exceed 25% of OTC listed securities or beneficiary units; total securities borrowing shall not exceed 10%.
  • Amount of securities borrowing orders on intraday market must not exceed 10% of the average transaction volume over last 30 business days, except for hedging purposes.
  • Average transaction volume and borrowing amount allowed will be given by TAI EXC.
  • For 3 months starting from 19 March 2020, investors can obtain other collateral with liquidity and can be objectively valued to make up difference for margin financing.
  • Financial and insurance industry is encouraged to make arrangements for dips and timely purchase of outstanding stocks with good fundamentals and low P/E ratios.
  • Listed companies urged to use treasury shares to strengthen investor confidence.

Effectiveness

  • This notice takes effect on 19 March 2020.