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Plan for new TSE trading hours may be axed

Brokerage workers demonstrate outside the Taiwan Stock Exchange yesterday to protest a proposal that would create a morning and afternoon trading session on the bourse. PHOTO: SEAN CHAO, TAIPEI TIMES

Although financial regulators yesterday said that they may ax the proposal to divide trading hours on the local bourse into a morning and afternoon session, around 10 brokerage workers still showed up to protest against the proposal outside the Taiwan Stock Exchange (TSE) building yesterday afternoon.

The number of protesters who showed up at the TSE was much smaller than had been expected after regulators decided to apply the brakes on the proposal on Thursday in the face of a strong backlash from brokerage staff and investors.

The protesters presented a letter of complaint and a list of signatures to the exchange's president Chen Ming-tai (陳明泰), and urged the stock exchange and the Financial Supervisory Commission to return to 9am-to-noon trading hours.

The local bourse currently has a single trading session opening at 9am and closing at 1:30pm, without any break.

On Monday, commission chairman Kong Jaw-sheng (龔照勝) announced that the financial regulator was considering to extend trading to 3:30pm with a two-hour break, based on a plan proposed by the Taiwan Securities Association.

Kong said the change is intended to add extra stimulation to the stock market while providing convenience to individual investors and securities houses by introducing the break at midday.

However, the announcement immediately triggered waves of opposition from brokerage staff and investors, who said that the move would neither boost the transaction value of stock trading nor make the local bourse more "internationalized," as Kong had claimed.

According to a half-page advertisement posted in Chinese-language newspapers on Thursday, the total value of stock transactions plummeted 27.78 percent to US$717.3 billion last year from US$993.3 billion in 2000 after the current four-and-a-half-hour trading system was introduced in January 2001.

The ad also criticized a lack of communication and opinion gathering behind the proposed change, and called on securities workers to participate in the protest outside the Taiwan Stock Exchange building yesterday. A mass rally was planned for June 4.

The Financial Supervisory Commission, the stock exchange and the Securities and Futures Bureau responded to the furious criticism by saying that the proposal was still under discussion and would not be implemented within the next year or two.

"We haven't hammered out a specific timetable, as we are still uncertain how much time the brokerage houses will need to adjust their computer systems [to cope with the new trading mechanism]," Taiwan Stock Exchange chairman Wu Nai-jen (吳乃仁) said on Thursday.

Financial Supervisory Commission Vice Chairman Lu Daung-yen (呂東英) said that the commission has not even started examining the feasibility of the proposal, so it is far from being a formal policy.

Protesters yesterday expressed reservations about the rally scheduled for next Saturday, saying it depends on the government's response to their appeal.

After becoming a target of public criticism, the Taiwan Securities Association urged the public to allow more discussion and opinion exchanges before any new changes are put into practice.

Kuo Chung-chien (郭仲乾), a member of the association and executive vice president of Waterland Securities Co (國票證券), said that the plan could also have advantages, not just drawbacks, as its opponents claim.

"If we cannot even talk about it, how can this market make any progress?" he said.
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