The Financial Supervisory Commission (FSC) yesterday said that it planned to propose new stimulus measures next month to ease stock trading rules in an effort to bolster slow trading volume, prompting speculation that the relaxation could include raising the daily stock trading limit to 10 percent.
The FSC’s comments came after legislators on Friday approved the proposal to suspend the controversial capital gains tax on active stock traders for three years. The regulation is to take effect in 2018.
On Saturday, FSC Chairman William Tseng (曾銘宗) said in a post on Facebook that the commission plans to work with the Taiwan Stock Exchange and the GRETAI Securities Market to draft measures for Taiwan’s stock exchange market development.
“We will come up with new measures to relax stock trading rules by the end of January,” Tseng (曾銘宗) said yesterday by telephone.
Tseng declined to say whether those planned new measures would include raising the stock trading limit to 10 percent from the current 7 percent, as CNA reported yesterday.
“We have not yet discussed the details of any possible measures,” Tseng said.
The CNA report also said the commission was considering lifting restrictions on the use of leverage used in day trading from balance of margin loans and stock loans for individual investors, allowing stock brokerages to decide the amount of leverage for individual investors.
Downplaying the potential relaxation, Tseng said: “We will listen to experts’ opinions from various sectors and then we will propose [new] measures by the end of January.”
The FSC has launched several new measures to boost stock trading volume, but its efforts have not paid off, as the proposed capital gains tax on active stock investors has driven away investors from the stock market, Tseng said. The capital gains tax was originally planned to go into effect next year.
The report said that increasing stock prices’ daily downward and upward limits and lifting the leverage used in day trading for stock brokerages could boost daily trading volume, adding that the FSC planned to carry out the changes in the second half of next year at the earliest.
Currently, the ceiling for the balance of margin loans and stock loans for individual investors’ day trading is NT$80 million (US$2.52 million).
The last time the government raised the daily maximum decline or increase was from 5 percent to 7 percent in October 1989.
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