Taiwan Extends Short-Selling Curbs Amid Global Market Volatility

Financial Regulators in Taiwan Act to Stabilize Stock Market in Uncertain Times

Taipei, April 12 – In response to continued uncertainty in global financial markets, particularly stemming from recent tariff actions by the Trump administration, Taiwan's Financial Supervisory Commission (FSC) announced a one-week extension of measures to curb short selling on the local stock market.

Initially implemented last week, effective from April 7th to 11th, these measures were a direct response to the imposition of sweeping reciprocal tariffs by U.S. President Donald Trump on April 2nd (U.S. time), which included a significant 32% duty on Taiwan.

The FSC's restrictions on short selling include a substantial reduction in intraday sell orders for borrowed securities. The limit has been slashed from 30% of a stock's average trading volume over the previous 30 sessions to a mere 3%.

Additionally, the minimum margin ratio for short selling on both the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (OTC market) has been increased, moving from 90% to 130%.

The FSC has also eased certain limits on the types of collateral accepted to cover margin deficits, offering further flexibility to market participants.

Despite these protective measures being in place this week, the Taiex, the primary weighted index on the TWSE, experienced a significant downturn, plunging by 1,769.45 points, equivalent to an 8.31% decrease, amidst ongoing global volatility.

These heavy losses occurred despite the intervention of the NT$500 billion (US$15.15 billion) National Financial Stabilization Fund, a government-backed entity established in 2000 to provide a buffer against external shocks impacting the local stock market, which began its intervention on Wednesday.

The FSC has confirmed that the measures to limit short selling will remain in effect until April 18th, even though Trump has announced a 90-day pause on the new tariffs, with reduced 10% duties now applied to all countries except China.

According to the FSC, while there have been signs of stabilization in the global financial markets, uncertainties persist. The commission's primary aim is to safeguard investor interests by maintaining these short-selling restrictions for another week.

The FSC has reiterated its commitment to closely monitor market conditions both domestically and internationally and pledged to adjust its policies as necessary.