讀後心得

In response to the impact of U.S. tariff policy, Taiwan's stock market has experienced a significant decline. The Financial Supervisory Commission today (7th) implemented the strictest short-selling regulations in history. The new measures include: 1. The total volume of borrowed shares for short selling is reduced from 30% to 3%; 2. The margin for short selling is raised to 130%. This short-selling regulation is in effect for five days and aims to mitigate the impact of speculative short selling and reduce pressure from foreign investors on the stock market. Premier Su Tseng-chang has consulted with the financial departments to formulate response strategies for future market fluctuations.

Illustration of Taiwan Stock Market.

The tariff turmoil in the United States has led to fluctuations in global stock markets. In order to prevent speculators from taking advantage of the situation to exacerbate the decline of the Taiwan stock market, the Financial Supervisory Commission announced the implementation of two of the strictest short-selling measures in history starting today, including:

• 1. The total amount of securities borrowed by investors for short selling is reduced to 3%, significantly lowering the costs for foreign investors to borrow securities for short sales.
• 2. The margin requirement for short selling is raised to 130%, and this measure will continue until the 11th of this month, totaling five days.

This marks the first time the Financial Supervisory Commission has implemented short-selling restrictions in nearly three years. Compared to previous measures, the intensity of this one is considered the strongest in history, especially the borrowing restrictions on foreign investors, which are nearly equivalent to a ban on short selling by foreign investors, aiming to limit the selling pressure from foreign entities on stocks, help alleviate the impact faced by weighted stocks, and promote market stability.

The Deputy Director of the Securities and Futures Bureau stated that the focus of this measure is to comprehensively prevent speculative short-selling activities. The market generally views speculative short-sellers as vultures, whose actions exacerbate declines when the stock market is falling.

With the instability of Trump’s tariff policy, negotiations between various countries and the U.S. are also extremely important; therefore, the short-selling measures will be reassessed in five days and adjusted based on Trump’s tariff policy, international stock markets, and the effectiveness of the measures implemented.

Yesterday, the Premier convened a meeting with officials from the economic department to discuss how to respond to the violent fluctuations in the domestic stock market and to formulate corresponding countermeasures. The Financial Supervisory Commission adopted three temporary measures:

• 1. Relaxing the range of acceptable collateral.
• 2. The total amount of securities borrowed for short selling during the trading day is reduced from 30% of the average amount over the past 30 days to 3%.
• 3. The margin requirement for short selling is raised from 90% to 130%.

The intensity of this adjustment far exceeds the reduction seen in October 2022, when short-selling restrictions were only reduced to 10%.