Taiwan to relax securities lending and borrowing rules

Taiwan’s Financial Supervisory Commission (FSC) is set to relax rules on securities borrowing and lending from 1 January 2016, according to reports.

At present, retail equity investors are currently only allowed to borrow securities from the Taiwan Stock Exchange, brokerages and other financial institutions. Should the change occur, it will allow transactions between individual investors, securities finance companies and securities brokerages.

The country’s FSC has recently relaxed the rules on day trading so that investors of a given stock are allowed to buy first and sell later or sell first and buy later in a single session. More than 400 stocks on the main board and the over-the-counter market are eligible for day trading.

According to reports, the FSC said that the move to allow retail investors to lend securities to brokerages is expected to create an alternative profit source from the new business for retail investors, while brokerages are expected to boost their securities stocks and make their investment strategies more flexible.

The FSC also allegedly considering removing the $639,550 cap on margin loans to individual investors, leaving brokerages and financial institutions to determine the ceiling on a bespoke basis.