After a special meeting held Thursday with representatives from the securities industry, the Securities and Futures Commis-sion (SFC, 證期會) has preliminarily decided to extend trading hours into the afternoon.
The session would go from morning to afternoon without stopping for a break. In addition, Saturday trade would be ended after the hours are extended. Investors can also expect a half-hour of fixed-priced "after hours" trading once the new hours take effect.
"Extension of trading hours into the afternoon is a must for the Taiwan stock market if it is to become an internationalized market," said K.P. Liu (
"Therefore, convenience for foreign and domestic investors should be the primary concern of the regulatory agencies," Liu said. "Longer trading hours would provide more convenience ... Other considerations should be put behind" investors' concerns, Liu said.
At the Thursday meeting, a majority of the securities firms suggested that trade should be extended continuously into the afternoon between Monday and Friday.
Some suggested hours be extended to 1:30pm, while others suggested 2pm or 3pm.
What was clear is that most securities firms did not support breaking up the trading day into morning and afternoon sessions, as is the practice in Hong Kong.
The primary reason most securities companies gave for supporting one continuous session was that it would result in cost savings, as two separate sessions would likely take up more hours of a day.
Some executives said the continuous session could even attract customers to place orders during their lunch hour, thus resulting in more business.
In addition, a continuous trading session would give them more time for transaction settlement after the day closes.
At the moment, however, the SFC has not made any definite conclusions about its proposal. The agency plans to submit a plan to the Ministry of Finance before the end of June, according to Ding Ker-Hua (丁克華), SFC deputy chairman.
The MOF will make the final determination on what the exact hours will be, with the earliest date for implementation being roughly a year from now.
As far as settlement and clearing dates go, most of the securities firms favor keeping the "T+2" system, meaning transactions are settled two days after a trade.
Though most European and American markets use "T+3" or "T+5" clearing systems, the international trend is for markets to have shorter settlement periods, which makes them more efficient, SFC officials said. Therefore, there is no inclination to switch to a longer settlement period when trading hours are extended.
The Association of Securities Brokers and Dealers also opposes extending the settlement and clearing period, as that could increase the risk that investors fail to meet their obligations.
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