讀後心得

The Taiwan stock market has faced significant setbacks due to the impact of the U.S. tariff policy. To prevent speculators from further driving down prices, the Financial Supervisory Commission has implemented two of the strictest short-selling measures starting today (the 7th): First, the total amount of borrowed shares that investors can sell has been limited to 3%, which is equivalent to reducing the borrowing privileges for foreign investors to one-tenth; second, the margin requirement for short selling has been raised to 130% for five consecutive days. This marks the first time in three years that the Financial Supervisory Commission has activated a short-selling restriction, aimed at curbing speculative short-selling activities and alleviating pressure on the stock market. Zhuo Rongtai has also convened financial officials to discuss strategies to respond to stock market volatility.

Diagram of Taiwan's stock market.

The U.S. tariff tsunami has triggered a global stock market crash. To prevent vultures from further exacerbating the decline of the Taiwan stock market, the Financial Supervisory Commission has implemented two historically "strict" short-selling restrictions starting today, which include:

• The total amount of borrowed shares sold by investors is reduced to 3%, equivalent to cutting foreign institutional investors' short selling ratio to one-tenth;
• The margin requirement for borrowed shares is raised to 130%, and this measure will continue for five days, until the 11th.

This is the first time in three years that the Financial Supervisory Commission has initiated a short-selling ban. The biggest difference from previous measures is that "the intensity is the strongest in history," especially the restrictions on foreign borrowed shares are almost equivalent to banning foreign institutional investors from short-selling, which can effectively suppress foreign institutions' bearish attacks on stocks, thereby stabilizing blue-chip stocks and the overall stock market. The Deputy Director of the Securities and Futures Bureau stated that this measure is aimed at comprehensively preventing "speculative shorts" to avoid further predation by vultures when the stock market declines.

Considering the ever-changing tariff policies of Trump and the negotiations between various countries and the United States, the short-selling ban will be in effect for five days, and will be flexibly adjusted in the future based on the changes in Trump's policies, the reactions of international stock markets, and the impact of the short-selling measures.

The Executive Yuan's Premier convened officials from financial departments yesterday morning to discuss response plans for the domestic stock market facing severe volatility. Meanwhile, the Financial Supervisory Commission has also launched three major temporary measures:

• Relaxing the range of collateralization;
• Reducing the total amount of shares that investors can borrow and sell during trading hours, from 30% of the average over the previous 30 days to 3%;
• Raising the margin requirement for borrowed shares from 90% to 130%.

The last reduction in borrowed shares sale was in October 2022, when the reduction was 10%, and this time it has been further cut to 3%.