Taiwan Authorizes 10th Fund Intervention and Cuts Short-Sale Cap to 3%

Taiwan authorized its National Financial Stabilization Fund’s 10th market intervention, a response to a steep Nov. 6 selloff in a major semiconductor market, while regulators will sharply restrict short selling from Nov. 9.

The fund’s executive secretary may deploy up to NT$500 billion as conditions warrant. No purchase amount or schedule was disclosed.

Taiwan’s benchmark stock index fell 1,873.08 points on Nov. 6 to close at 39,701.64, after dropping 3,737.67 points in the opening minute. It lost 5,510 points from Nov. 2 through Nov. 6, a 12.19% weekly decline.

Taiwan’s Financial Supervisory Commission, the country’s financial regulator, will lower the daily limit on intraday short-sale orders using borrowed securities to 3% of average trading volume over the previous 30 business days, down from 30%. The minimum margin for short sales of listed and over-the-counter securities will rise to 130% from 90%. Broker sales used to hedge warrants or exchange-traded notes, or to make markets, are exempt from the cap. The new limits take effect Nov. 9.