Taiwan limits short selling as U.S. tariffs rock global markets

Taipei, April 6 (CNA) Taiwan's top financial regulator has announced temporary stock market measures, including tightened limits on short selling, in a bid to maintain stability amid chaos on world markets driven by sweeping U.S. tariffs.

In a statement issued Sunday evening, the Financial Supervisory Commission (FSC) said that Taiwan's stock market has yet to react to the U.S. tariffs and global response due to a long holiday weekend that began on Thursday.

For this reason, as well as continued uncertainty on global markets regarding the tariffs, the FSC said it has decided to impose temporary regulations from Monday through Friday to guarantee the stability of the stock market and the interests of investors.

While stopping short of banning short selling, the FSC said it would reduce the limit of intraday sell orders for borrowed securities from 30 percent of the average trading volume of the stock over the previous 30 business days to only 3 percent.

At the same time, the minimum margin ratio for short selling on the Taiwan Stock Exchange (TWSE) or the Taipei Exchange (which operates the local OTC market) will be raised from 90 percent to 130 percent, the FSC said.

Meanwhile, the FSC also said it would ease limits on the types of collateral that can be used to cover a margin deficit.

The regulator's announcement came after FSC Chairman Peng Jin-lung (彭金隆) and TWSE Chairman Sherman Lin (林修銘) met with Premier Cho Jung-tai (卓榮泰) Sunday morning to analyze past major drops on the stock market and discuss possible response measures.

Since U.S. President Donald Trump imposed tariffs on over 180 countries on April 2, global stocks have fallen sharply. In the U.S., over US$6 trillion was wiped from markets by the plunge, while the Dow Jones Industrial Average fell by more than 1,500 points two days in a row for the first time ever.