Stock market daily limit to stay: FSC

Financial authorities yesterday made another about-face, denying that the government is thinking of a phased shelving of the 7 percent daily limit on stock fluctuations in line with global financial practice.

"The Financial Supervisory Commission [FSC] has no plans [to remove the limit], which requires more discussion and a final consensus," commission vice chairwoman Susan Chang (張秀蓮) told reporters yesterday, rebutting an earlier report by Dow Jones Newswires.

On Tuesday, Minister of Finance Lin Chuan (林全) said that his ministry was not planning to introduce a capital-gains tax on stocks for the time being and that there was no timetable for doing so in the future. But investor concerns over the proposed tariff sent the TAIEX down by 163.42 points to 5,325.68 on Tuesday.

Stock markets yesterday appeared unmoved by the Dow Jones report, which said on Monday that the regulator would remove the daily limit on stock gains or losses, though no timeframe was cited.

"We will do this step by step, but we can reasonably expect the first step to happen very soon," Dow Jones quoted Financial Supervisory Commission chairman Kong Jaw-sheng (龔照勝) as saying.

The 7 percent daily limit has been criticized for possibly distorting market forces and preventing maturation of the stock market.

Chang also denied a local media report that the commis-sion's Securities and Futures Bureau had proposed to increase the 7 percent limit to around 10 percent but that the idea was later dropped after the TAIEX plummeted to an all-time low.

Wu Tang-chieh (吳當傑), head of the Securities and Futures Bureau, yesterday clarified the official stance on the policy.

"No internal discussion on the policy has ever been entered into within the commission. Neither has the commission come under any pressure from the private sector to scrap the limit," Wu said.