Taiwan’s Financial Supervisory Commission (FSC) will tighten short-selling limits and raise margin requirements Monday, Nov. 9, following a steep market decline that led the regulator to announce a package of trading measures.
The FSC cut the cap on intraday sell orders backed by borrowed securities to 3% of a security’s average daily trading volume over the previous 30 business days, down from 30%. Some hedging, liquidity-provision and market-making transactions are exempt. The regulator also raised the minimum margin for short sales of listed and over-the-counter securities to 130% from 90%.
With approval from a securities firm or securities finance enterprise, investors may use additional liquid assets with objectively assessable value to cover either a margin-purchase down payment or a short-sale margin shortfall. The FSC also encouraged listed companies to consider share buybacks and hold investor briefings.
The TAIEX fell to 37,837.05 during Friday’s session, according to TWSE historical index data. It closed at 39,701.64, down 1,873.08 points, Taiwan Stock Exchange daily data showed.
The measures take effect Monday, Nov. 9.
