Taiwan Stock Exchange Enhances Stock Market and Increases Trading Efficiency for Connecting the International Market

  • Trade Finance
  • 17.06.2015 01:00 am

Taiwan's Financial Supervisory Commission (FSC) launched the 'Market Uplift Plan' this past February to further a transparent, fair and efficient capital market and to enhance Taiwan's competitiveness in the global market. In the Market Uplift Plan, there are 15 measures made under 8 policies. 

The Taiwan Stock Exchange Corporation (TWSE) will launch two measures, lifting market transaction restrictions starting June 1. The first one will be the relaxation of the daily price limit from the present 7%, to 10%. This regulation change will accelerate price discovery, and also increase the efficiency and liquidity of the market. In amending a practice of 25 years, the FSC shows its commitment to aligning the TWSE with international practice.

The second liberalization measure, also effective June 1, is the expansion of the scope of day trading. In additional to the 200 stocks in the TAIWAN 50 index, 100 MID-cap INDEX and the GTSM50 Index currently, more stocks will be available for day trading, comprising those that are authorized to issue warrants and all ETFs. This extension will provide investors more flexibility in their investment planning, increase the liquidity in the market, and enhance Taiwan's global market competitiveness.

Moreover, in order to provide investors with trading information that is more reflective of the order book, starting June 29, the TWSE will disclose the indicative trading price, volume and indicative 5 best bid/ask prices during the pre-opening session (8:30-9:00) and pre-closing session (13:25-13:30). 

The last measure will affect securities loans in the market. The TWSE has already introduced policies regarding stock lending by brokers. At present, investors can only borrow shares from securities companies. In the future, securities firms can also borrow from their customers, and the securities firms can also make loans to each other. On top of that, securities firms will be able to negotiate initial collateral ratios and maintenance ratios with professional institutional borrowers on their own. These measures will increase the business opportunities for securities companies and also enhance share owners' yield. Furthermore, the TWSE also increased the number of eligible securities to 1357, cancelled the limitation of amount for brokers lending to one single client, and allowed the roll-over of contracts to occur twice. Additionally, a bank guarantee is now able to be accepted as eligible collateral. All these new rules will synergize Taiwan's securities lending with global practices.

The Taiwan Stock Exchange is the first stock exchange in Asia to enforce that listed companies report corporate social responsibilities in accordance with GRI G4 guidelines in the Asia Pacific region. In order to enhance our global competitiveness, the TWSE released the Corporate Governance Evaluation results on April 30 2015, in line with the "2013 Corporate Governance Roadmap."

Assessments were conducted through the Corporate Governance Center evaluation task force and corporate self-evaluations. In total, 1,393 companies were evaluated (798 TWSE-listed and 595 TPEx-listed companies), with the top 20% of scores being published to honor the strongest performers. Companies ranked in the top 5% will be honored in June.
 

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