Taiwan removes uptick rule
28 September 2015 Taipei
Image: Shutterstock
The four-week uptick rule in Taiwan was lifted last week after renewed market stability.
Taiwan鈥檚 Financial Supervisory Commission has prohibited the short selling of Taiwanese shares for less than the previous trading day鈥檚 closing price since 24 August.
There was a 1.8 percent drop in market value immediately after the uptick rule was removed on 21 September, according to SunGard鈥檚 Astec Analytics.
Balances on loan also decreased by around 5 percent follow the rule鈥檚 repeal.
Borrowing volumes dipped to within a few percent of their 12-month low on the day the rule was applied and rose to around 90 percent of the 12-month peak over the following two weeks, despite the uptick rule being in place, according to SunGard.
A recovery of Taiwan鈥檚 benchmark index along with the US Federal Reserve鈥檚 decision to maintain current interest rates and a general unwillingness by the new government in Taipei to maintain restrictive market conditions were cited as key reasons for the rule鈥檚 removal.
Taiwan鈥檚 Financial Supervisory Commission has prohibited the short selling of Taiwanese shares for less than the previous trading day鈥檚 closing price since 24 August.
There was a 1.8 percent drop in market value immediately after the uptick rule was removed on 21 September, according to SunGard鈥檚 Astec Analytics.
Balances on loan also decreased by around 5 percent follow the rule鈥檚 repeal.
Borrowing volumes dipped to within a few percent of their 12-month low on the day the rule was applied and rose to around 90 percent of the 12-month peak over the following two weeks, despite the uptick rule being in place, according to SunGard.
A recovery of Taiwan鈥檚 benchmark index along with the US Federal Reserve鈥檚 decision to maintain current interest rates and a general unwillingness by the new government in Taipei to maintain restrictive market conditions were cited as key reasons for the rule鈥檚 removal.
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