Local securities houses support odd-lot intraday trading, but want supplementary measures to avoid confusion and boost efficiency, Taiwan Securities Association (券商公會) chairman Ted M.H. Ho (賀鳴珩) said yesterday.
The trade association has proposed implementing odd-lot intraday trading, but the Financial Supervisory Commission said that the group should obtain the consent of all peers after some expressed misgivings about the practice in 2016 .
“If you ask brokerages whether they support the idea, surely some will voice doubts. However, if the government introduces complementary measures, I am confident that all will come on board, as it is good for business,” Ho told the Taipei Times on the sidelines of an event in Taipei.
Unlike Taiwan, most countries do not require investors to purchase a standard unit of shares during trading hours, but allow investors to buy any number of shares they want, he said.
Investors are required to buy at least 1,000 shares on the local bourses.
Taiwan should keep up with international practices and give investors more flexibility, Ho said.
The adoption of odd-lot intraday trading could benefit retail investors by lowering the purchase threshold of high-priced stocks and help boost the market, he added.
However, concerns over confusion makes sense, Ho said, as investors and brokers might mix up the two systems and submit incorrect orders.
The proposed mechanism could therefore raise operational costs, he added.
“Good methods are needed to cope with potential mistakes,” he said.
Ho, who is also the chairman of Yuanta Securities Co (元大證券), said that investors intent on odd-lot intraday trading should do so over the Internet rather than calling stock brokers by telephone to enhance efficiency.
“If the trader gets a call from customers to buy just one or two shares during peak hours, the cost-benefit ratio would be low, and dealers would not have motivation for such trades,” Ho said.
As for investors who are used to conducting transactions by phone, they can continue to do so by asking brokerages for help after the trading session, he added.
The association would hold discussions with the commission on the issue later this year, Ho said.
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