FSC to Lift the Short-Selling Ban
2023-02-23
Considering that the global stock market gradually back on track and the easing of uncertainties in the international market, the FSC decided to take the following measures after careful evaluation:
I. Reverting to the original maximum quantity of intraday sell orders for borrowed securities: The maximum quantity of intraday sell orders for borrowed securities per day will revert from 10% of the average daily trading volume of such securities in the previous 30 business days, which was implemented on October 12, 2022, to 30% on February 24, 2023.
II. Reverting to the original minimum margin ratio for short sale: The minimum margin ratio for the short sale of TWSE and TPEx listed securities will revert from 120%, which was implemented on October 12, 2022, to 90% on February 24, 2023.
III. Canceling the requirement that if the current closing price drops more than 3.5%, no short sale is allowed on the next trading day at a price lower than the previous closing price: The FSC previously announced that, from October 21, 2022 when investors short-selling or sales of borrowed TWSE or TPEx listed stocks or Taiwan depository receipts from the securities lending system of the TWSE, securities firms or securities finance enterprises, if the closing price of the securities on the current day drops by more than 3.5%, then no short sale or sales of borrowed stocks or Taiwan depository receipts is allowed on the next trading day at a price lower than the previous closing price; if the closing price of the next trading day still falls by more than 3.5%, the price restriction shall continue. The previous measure will cease to apply immediately.
IV. Canceling the measure of relaxing the scope of collateral to cover the Margin Deficiency: The FSC previously announced that since July 15, 2022, investors may, with the consent of the credit institution, make up the margin difference for margin transactions or make up the short sale margin difference with non-cash collateral that has market liquidity and can be objectively and reasonably evaluated. This measure will cease to apply from February 24, 2023.
V. The FSC will continue to watch the development of the international political and economic situation and the trading situation of the securities market. In case of any irrational fluctuation in the stock market, the FSC will make a timely and prudent assessment and respond accordingly.
Contact unit: Tiffany Chiu, Section Chief, Securities Trading Division, Securities and Futures Bureau
Tel: (02)2774-7431
For questions, please write to:FSCmail
I. Reverting to the original maximum quantity of intraday sell orders for borrowed securities: The maximum quantity of intraday sell orders for borrowed securities per day will revert from 10% of the average daily trading volume of such securities in the previous 30 business days, which was implemented on October 12, 2022, to 30% on February 24, 2023.
II. Reverting to the original minimum margin ratio for short sale: The minimum margin ratio for the short sale of TWSE and TPEx listed securities will revert from 120%, which was implemented on October 12, 2022, to 90% on February 24, 2023.
III. Canceling the requirement that if the current closing price drops more than 3.5%, no short sale is allowed on the next trading day at a price lower than the previous closing price: The FSC previously announced that, from October 21, 2022 when investors short-selling or sales of borrowed TWSE or TPEx listed stocks or Taiwan depository receipts from the securities lending system of the TWSE, securities firms or securities finance enterprises, if the closing price of the securities on the current day drops by more than 3.5%, then no short sale or sales of borrowed stocks or Taiwan depository receipts is allowed on the next trading day at a price lower than the previous closing price; if the closing price of the next trading day still falls by more than 3.5%, the price restriction shall continue. The previous measure will cease to apply immediately.
IV. Canceling the measure of relaxing the scope of collateral to cover the Margin Deficiency: The FSC previously announced that since July 15, 2022, investors may, with the consent of the credit institution, make up the margin difference for margin transactions or make up the short sale margin difference with non-cash collateral that has market liquidity and can be objectively and reasonably evaluated. This measure will cease to apply from February 24, 2023.
V. The FSC will continue to watch the development of the international political and economic situation and the trading situation of the securities market. In case of any irrational fluctuation in the stock market, the FSC will make a timely and prudent assessment and respond accordingly.
Contact unit: Tiffany Chiu, Section Chief, Securities Trading Division, Securities and Futures Bureau
Tel: (02)2774-7431
For questions, please write to:FSCmail
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1634
Update：
2023-03-09