US investors would be prohibited from trading TAIEX futures by the US securities regulator from as early as July 29 due to a classification of the TAIEX as a so-called “narrow-based security index,” the Financial Supervisory Commission (FSC) said on Tuesday.
The heavy weighting of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has prompted the TAIEX futures to hit criteria set by the US Commodity Futures Trading Commission (CFTC).
Therefore the CFTC is expected to ban US investors from trading TAIEX futures and mini-TAIEX futures.
Photo: CNA
TAIEX futures and mini-TAIEX futures have different contract terms, including value and deposits, but their underlying index is the TAIEX.
From Feb. 15 to Monday, TSMC, the most heavily weighted stock in the local market, had accounted for more than 30 percent of the local main board’s total turnover for 45 trading sessions in a row, which led the TAIEX to meet one of the criteria set by the CFTC defining it as a narrow-based security index.
Due to TSMC’s heavy weighting, the CFTC would soon be informed by the Taiwan Futures Exchange that the exchange has met the criteria to be classified as a narrow-based security index, Securities and Futures Bureau Deputy Director-General Julian Hwang (黃厚銘) said on Tuesday, adding that the exchange awaits a response from the CTFC regarding revoking trading permissions of TAIEX futures and mini-TAIEX futures, he said.
The CFTC’s revoking of the trading permission for TAIEX futures and mini-TAIEX futures would likely be implemented on July 29 because of a three-month grace period, Huang said.
US investors make up only 0.7 percent of the transactions in Taiwan’s futures markets, Huang said.
Many investors in the US markets belong to multinational groups, which allow them to trade TAIEX futures through overseas affiliates, he said.
The impact of the revoking on the local equity market is expected to be minimal, he added.
However, past experiences indicate the impact could be more serious.
In April 2021, the CFTC revoked TAIEX futures and mini-TAIEX futures trading permissions, also because TSMC’s heavy weighting led the TAIEX to be classified as a narrow-based security index.
The trading permissions were not regranted until October 2022. During the period, the TAIEX fell from 16,571 to 12,856.
It is unlikely that the FSC would impose a weighting ceiling on a single stock to avoid a CFTC ban, Huang said.
However, Taiwan Futures Exchange officials would make more visits to foreign institutional investors to encourage them to participate in the local futures markets, he said.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
Popular vape brands such as Geek Bar might get more expensive in the US — if you can find them at all. Shipments of vapes from China to the US ground to a near halt last month from a year ago, official data showed, hit by US President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives. That includes Geek Bar, a brand of flavored vapes that is not authorized to sell in the US, but which had been widely available due to porous import controls. One retailer, who asked not to be named, because
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS