Sat, Nov 19, 2016 - Page 12 News List

After-hours platform to boost access to hedging tools

By Ted Chen  /  Staff reporter

Investors will have greater access to risk hedging tools when an after-hours futures trading platform launches next year, the Financial Supervisory Commission said on Thursday.

The Taiwan Futures Exchange (TAIFEX) and the nation’s 15 exclusive futures commission merchants plan to establish the platform, which is expected to be launched in May next year, the commission told a news conference.

“Expanding after-hours futures trading is part of the commission’s plan to address issues around shorter trading hours in the local securities market, and would provide investors with a hedging tool against overnight developments in the global markets,” commission Vice Chairman Cheng Cheng-mount (鄭貞茂) said.


“Turnover in the futures market would increase along with rising volatility in the stock market,” Cheng said.

The platform would enable after-hours trading of TAIFEX Futures that tracks the board between 3pm and 5am, beginning between 70 and 75 minutes after the end of regular trading between 8:45am and 1:45pm, the financial commission said.

The longer hours would help local investors react to changes during trading hours in the US and Europe, the commission said.

Initially, the more popular TAIFEX Futures and option contracts would be included in the platform, as well as futures and options contracts tracking US dollar to Chinese yuan exchange rates, Securities and Futures Bureau Chief Secretary Tsai Li-ling (蔡麗玲) said.


“Brokerages have been requesting expanded after-hours trading, in light of the availability of round-the-clock trading at futures exchanges in Japan, Singapore, and Hong Kong,” Tsai said.

The platform is expected to bring in additional earnings of NT$261 million (US$8.15 million) for the TAIFEX in its first year, Tsai said, adding that the exchange would need to employ an additional 210 people.


However, unlike the futures market, Tsai said that brokerages, dealers and investors are undecided about expanding trading hours for the Taiwan Stock Exchange as a way to boost persistently anemic turnover, and that it is harder to reach a consensus to implement change.

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