FSC Formulates Measures to Vitalize Stock Market

Taipei, Dec. 6, 2012 (CENS)--To vitalize the stock market, the Financial Supervisory Commission (FSC) is planning to permit intraday trading in the form of buying before selling the same stock in the same trading session, without restriction on targeted stock, and coordinate with the Taiwan Stock Exchange (TSE) for lowering the fees for securities dealers.

The FSC, however, remains neutral towards the suggestion of Taiwan Securities Association allowing short sales of medium- and small-cap stocks at prices below the level in the previous trading session. Instead, it will offer analysis on the advantages and disadvantages of the move and pass the suggestion to the Executive Yuan (the Cabinet) for final decision.

Presently, investors can only short-sell value-weighted stocks, such as constituent stocks of Taiwan Top 50 Tracker Fund, at prices below the level in the previous trading session. Securities firms believe that the restriction blocks the normal trading of the market but the FSC worries that removal of the restriction would impact stock prices.

The FSC put forth the aforementioned measures for vitalizing the stock market at a meeting with ranking officials of securities firms, investment trust firms, and futures firms, as well as chiefs of Taiwan Stock Exchange, GreTai Securities Market, and Taiwan Futures Exchange, yesterday (Dec. 5).

Huang Tien-mu, director general of Securities and Futures Bureau (SFB), noted that the FSC will present the proposal at a meeting of the Executive Yuan next Monday.

To avoid default on the proposed intraday trading, the FSC will formulate credit evaluation measures for investors and securities firms. An official of SFB expressed the new measure will be put into practice next May, at earliest, considering the time needed by securities firms to revise and test their systems.

The FSC also hopes TSE and GreTai Securities Market can cut their fees for securities dealers with large trading volume, so as to lower their trading cost.