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.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS