The Financial Supervisory Commission (FSC) yesterday said that it could end the practice of opening Taiwan’s equity market on Saturdays to make up for lost trading sessions due to national holidays.
FSC Chairman Wellington Koo (顧立雄) said that the practice — which a few times each year leads to Taipei being the only equity market in the world that is open for trading — could be halted as soon as next year, depending on the opinions of the Taiwan Securities Association’s (券商公會) member brokerages.
A decision by the brokerage industry and regulators should begin to form toward the end of October, Koo said on the sidelines of a financial technology forum in Taipei.
“While most countries have national holidays that put a halt on trading, Taiwan’s Saturday trading sessions are peculiar and need to be examined to be more in line with global norms,” Koo said.
Abolishing equities trading, clearing and settlement on makeup days has been debated for a decade, Koo said.
However, the decision to investigate the issue was not prompted by a suggestion included in the American Chamber of Commerce in Taipei’s latest Taiwan White Paper, he added.
The central bank, which oversees the foreign exchange market, does not agree. It said that currency trading must be kept open on all regular and makeup business days as long as banks are open for business.
Securities and Futures Bureau Deputy Director Chang Chen-shan (張振山) allayed concerns about the commission and central bank’s differing opinions, saying that the nation’s equity and currency markets operate independently of each other.
“The FSC does not need the central bank’s approval to abolish Saturday trading sessions,” Chang said.
In the past two years, Saturday makeup trading sessions have resulted in a far lower turnover compared with the normal daily average, skewing the market’s annual statistics, Chang said.
However, smaller brokerages had opposed halting Saturday trading in the past, in particular during periods of anemic daily turnover, saying that the move would result in lost earnings, he said.
The commission has observed that many brokerage employees have taken on the role of financial advisers and could spend their time on makeup days reaching out to their clients or performing other tasks, Chang said.
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