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Continuous trading simulation platform to open Monday

2019/03/23 19:30:13

Taipei, March 23 (CNA) A continuous trading simulation platform for Taiwan's stock market will open Monday to give investors the chance to get familiar with the new trading mechanism, according to the Taiwan Stock Exchange (TWSE).

The TWSE will launch a continuous trading system in March 2020, and decided to first introduce a simulation platform to acclimate investors to the system, the exchange said.

Under a continuous trading system, which is commonly used in major markets around the world, buy and sell orders are immediately executed by traders without any time lag.

In contrast, the current call auction mechanism still used in Taiwan first collects buy and sell orders over a fixed period of time (five seconds in Taiwan) and matches the orders at the end of the period, according to the TWSE.

That can affect the outcomes of trading strategies, and with the new system also allowing different kinds of orders to be placed, including market orders, immediate or cancel (IOC) orders and fill or kill (FOK) orders, the TWSE felt a simulation platform was needed to give investors a feel for how the new system works.

The continuous trading simulation platform will be open between 2:30 p.m. and 5 p.m. after the market closes at 1:30 p.m. to prevent any interruptions to real trading activity.

To encourage investors to use the simulation platform, the TWSE will hold a lucky draw for participants offering prizes valued at more than NT$10 million (US$324,670). Prizes will include round trip air tickets in the region and iPhones.

The TWSE said it will also launch a series of free investment forums at community colleges around Taiwan between April 24 and June 29 to give investors a better understanding of the new system.

The continuous trading system will be formally opened on March 23, 2020, and all trades, with the exception of those at the opening and closing of the market, will be executed using that system.

The continuous trading platform will also provide both pre-trade and post-trade information, compared with only post-trade information available at present under the call auction market system, which should make the local market more transparent, the TWSE said.

Stock markets in New York, London, Tokyo, Hong Kong, Singapore, Shanghai, Shenzhen, Seoul, Bangkok and Kuala Lumpur all use continuous trading mechanisms, and the new system will help better align Taiwan with international standards, the TWSE said.

(By Wei Shu, Pan Chih-yi and Frances Huang)