TWSE Press Release
Securities borrowing and lending trading hours extended to 3:30pm starting on January 9, 2017
Publish Date︰2017/01/09 12:01
For the purpose of allowing securities firms have sufficient time to calculate values of collaterals and to submit collaterals and facilitating more smooth securities lending and borrowing processes in the market, starting on January 9, 2017, the trading hours of the TWSE securities borrowing and lending system and securities borrowing and lending by securities firms are extended from 9am to 3pm to 9am to 3:30pm.
According to TWSE, the TWSE securities borrowing and lending system was launched in 2003, and securities firms was permitted to handle securities borrowing and lending transactions in 2006. Since then market participants have been using the securities borrowing and lending market to satisfy needs in terms of short sales, return of borrowed securities or equity compensation, exercise of financial products, and subscription of ETF. As the securities borrowing and lending market grows, calculation of values of collaterals, replacement of collaterals and request for a confirmation from custodian bank of collaterals available involve the operational details of several parties. The existing reporting hours have become inadequate to support the daily demands of securities firms. To prevent ad hoc applications for an extension of the reporting deadline from disturbing the settlement processes, TWSE adopted the Taiwan Securities Association's suggestion and obtained the competent authority's approval accordingly. On December 20, 2016, TWSE announced that the Taiwan Stock Exchange Corporation Securities Borrowing and Lending Rules and the Operating Rules for Securities Lending by Securities Firms had been amended and the daily reporting deadline would be extended to 3:30pm, while the hours of mark to market after closing and other related processes would also be extended accordingly. The change will become effective on January 9, 2017.
When the reporting deadline for securities borrowing and lending is extended, securities firms will be able to perform their daily activities more efficiently, and the market as a whole can operate in a healthier manner. Securities borrowing and lending not only increases income to the lenders and facilitates more efficient utilization of securities, but also leads to more stocks circulated in the secondary market. Hence, liquidity in Taiwan's securities markets benefits greatly from the practice.