Taipei, April 19 (CNA) Recently adopted measures to curb short selling on the local stock market will continue as uncertainties created by the United States’ on-again, off-again tariff policies linger, the Financial Supervisory Commission (FSC) said Saturday.
The measures were put in place during the week of April 7 after U.S. President Donald Trump unveiled sweeping “reciprocal” tariffs on April 2 U.S. time, with Taiwan hit with a surprising 32 percent import duty.
The measures were then extended for another week to Friday, but unlike its previous two announcements, the FSC did not specify the duration of this extension in its statement Saturday.
Among the measures implemented, the FSC cut the limit of intraday sell orders for borrowed securities from 30 percent of the average trading volume of the stock over the previous 30 trading sessions to only 3 percent.
At the same time, the minimum margin ratio for short selling on the Taiwan Stock Exchange (TWSE), which runs the main market, and the Taipei Exchange, which operates the OTC market, was raised from 90 percent to 130 percent, according to the FSC.
In addition, the FSC has eased limits on the types of collateral that can be used to cover a margin deficit to reduce financial burdens shouldered by investors amid market volatility.
In the past week, the Taiwan Stock Exchange’s main index, the Taiex, ended 0.68 percent lower after falling 8.31 percent the week before.
The improved performance came after Trump announced a pause on the new measures April 9, with a 10 percent duty to be applied instead to all countries except China.
The FSC, the top financial regulator in Taiwan, said that although the market has shown signs of stabilizing, the Trump administration’s tariff threats and its current negotiations with trading partners on the tariff issues still posed challenges to global financial markets.
To protect investors’ interests, the FSC said it decided to keep the measures in place and help investors take on possible global volatility.
The FSC reiterated that the local market’s fundamentals were sound, with combined revenue of companies listed on the main and OTC markets in the first quarter of 2025 up 17.32 percent from a year earlier to NT$11.22 trillion (US$344 billion).
Yet, despite rising revenues, local stocks as a whole were trading at relatively low valuations with a price to earnings ratio of 17.28, indicating they could be attractive, the FSC said.
The commission said a growing number of listed companies were announcing share buyback programs to show their determination to support their share prices.
According to the FSC, a total of 125 listed companies had launched repurchase plans as of April 18, up from 82 as of April 11.
In addition to the FSC’s measures, the NT$500 billion National Financial Stabilization Fund, which was established in 2000 by the government to serve as a buffer against unexpected external factors that might disrupt the local bourse, has intervened in the market since April 9.
