The Financial Supervisory Commission (FSC) tightened its regulations on short selling by lowering the maximum number of securities that can be borrowed and increasing the margin requirement, moves intended to stabilize local stock markets.
The new measure limits the volume of intraday securities lending orders to 20% of the average daily trading volume over the previous 30 days, Securities and Futures Bureau director general Sam Chang told a virtual news conference. The FSC also boosted the margin requirement of securities lending to 100% from 90% to increase costs for bearish investors of local stocks, it said. It did not say how long the tightened short-selling regulations would last, although it would review its rules based on market activity.
The new curbs come after a bout of volatility in global markets, driven by concerns about the US Federal Reserve’s rate hikes and recession fears. An official said the TAIEX’s fall last month was not as steep as one two years ago, so the rules do not need to be tightened as much as they were then.