Measures to curb stock short selling prolonged into next week

Taipei, April 12 (CNA) The measures to curb short selling on the local stock market have been prolonged for another week into next week as the global financial markets still face uncertainties resulting from the latest round of the Trump administration's tariff actions, Taiwan's Financial Supervisory Commission (FSC) said Saturday.

Last week, the FSC announced these measures, originally effective from April 7-11, after U.S. President Donald Trump unveiled sweeping reciprocal tariffs on April 2 U.S. time with Taiwan faced with a surprising 32 percent duty.

Among the measures to cap short selling, the FSC has cut the limit of intraday sell orders for borrowed securities from 30 percent of the average trading volume of the stock over the previous 30 trading sessions to only 3 percent.

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

In addition, the FSC has also eased limits on the types of collateral that can be used to cover a margin deficit.

Despite these measures being in place this week, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE) still plunged 1,769,45 points, or 8.31 percent amid global volatility.

The heavy losses also came although the NT$500 billion (US$15.15 billion) National Financial Stabilization Fund, which was established in 2000 by the government to serve as a buffer against unexpected external factors that might disrupt the local bourse, started its intervention on Wednesday.

The FSC said the measures to limit short selling in the market will stay effective into April 18, although Trump has announced a 90-day pause on the new tariffs on Wednesday U.S. time, with reduced 10 percent duties to be applied instead to all countries except China.

The FSC said while the global financial markets showed signs of stabilizing to some extent, uncertainties remained in place so the commission aims to protect investors' interest by having the measures to ease short selling in place for another week.

The FSC added it will keep a close eye on market conditions at home and abroad and adjust its policies if necessary.