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New algorithm for calculating available volumes for SBL short sale takes effect

2012/03/22 11:44:09

Taipei, March 22 (CNA) Following the regulatory measures limiting the available volumes for SBL short sales, a new calculation of the volumes has been introduced and came online March 19, the Taiwan Stock Exchange said.

The Financial Regulatory Commission's rules implemented on Nov. 22, 2011 stipulate that investors are not allowed to short sell more than 20 percent of the average daily trading volume of the underlying securities over the previous 30 trading sessions.

The tighter rules are aimed at preventing an adverse impact on the local stock market as a result of excess SBL short sales, and to ease concerns over influencing stock prices through this practice, the exchange said.

In response to the rules, the TWSE has adjusted the calculation of the available volumes for SBL short sale and changed the way the information is disclosed.

The available volumes for SBL short sale is calculated by adding the SBL short sales of a stock and the position used in account adjustments to the balance of the previous session, minus the stocks returned by investors that day.

The balance is published on the TWSE website (www.twse.com.tw) to help investors understand the market situation and to improve transparency.

The information can be found under the "Market Info" segment on the TWSE website by clicking "Margin Trading & Short Sales," and then "Available volumes for SBL short sales," the exchange said.

The TWSE also pointed out that the usages of borrowed securities are not limited to short sales, since stocks can be borrowed to repay lenders, to meet obligations in financial product contracts or for creation and redemption of exchange traded funds.

In fact, the exchange noted that around 40 percent of stocks borrowed are not used for any purpose before they are returned. contact information:LI-JUNG WEN,Corporate Communications Dept.Taiwan Stock Exchange Corporation.Tel:(02)8101-3897. email: 0048@twse.com.tw.