TWSE Market Insights

＜中文版＞

The 64th Annual Meeting, General Assembly, Board of Directors Meeting, and Working Committee Meetings of the World Federation of Exchanges (WFE) were hosted by Borsa Istanbul (BIST) and held in Istanbul, Türkiye, from October 21 to 23, 2025. Representatives from major exchanges around the world gathered to cross connect on in-depth discussions on market structures, financial technology developments, and trends in cross-border cooperation, along with exploring the latest directions of global capital markets amid a rapidly transforming environment.

This year’s Annual Meeting marked the first introduction of the “Market Infrastructure Innovation Award,” inviting exchanges worldwide to submit innovative projects. A total of nine exchanges were selected to present during the meeting, sharing initiatives covering a wide range of topics. These included digital asset services, digitalized gold trading, optimization of initial public offering (IPO) processes, enhanced data utilization and market surveillance, promotion of sustainable bonds, inclusive finance tools, and extended night trading sessions. These presentations fully demonstrated the latest global achievements in digital transformation, operational efficiency, and inclusive finance.

Several exchanges showcased their key directions in market infrastructure development in recent years. There were many participants that shared their experiences. Deutsche Börse Group (DBG) has been committed to advancing the digitalization of the entire securities lifecycle, progressively integrating issuance, settlement, and clearing processes into electronic and real-time frameworks. The Astana International Exchange (AIX) combines gold reserves with digital technologies to promote the financialization of physical assets, enhancing the convenience and transparency of trading in traditional commodities. Börse Stuttgart Group (BSG) focuses on compliant digital asset services, providing retail investors with a safer environment for crypto-asset trading through regulated platforms. Other exchanges have introduced data analytics tools to strengthen market quality monitoring or adopted mobile-enabled processes to lower investment barriers and expand investor participation. At the same time, some exchanges offer sustainable financing platforms to help small- and medium-sized enterprises access sustainable bond markets, while others have extended night trading hours in response to cross-time-zone capital flows, enhancing market continuity and attractiveness to global investors.

Overall, the innovation proposals at this year’s meeting were highly concentrated around two major trends. The first is the continued digitalization of market infrastructure, including applications in settlement technology, asset tokenization, and data governance. The second is the strengthening of inclusive finance and investor education, aiming to enhance investor participation through lower entry thresholds, digital tools, and more inclusive market frameworks.

Among the presentations, the Taiwan Stock Exchange (TWSE) highlighted the strong growth of Taiwan’s ETF market. Over the past decade, assets under management have expanded more than 36-fold, and the number of beneficiaries has exceeded 15 million, placing Taiwan among the world’s leading ETF markets. Taiwan has become the third-largest ETF market in the Asia-Pacific region. These achievements reflect Taiwan’s sustained efforts in investor education, product innovation, cross-border cooperation, and the enhancement of market mechanism, together with having positioned ETFs as an important tool for improving financial literacy and broadening participation in wealth management.

• Transformation Trends: A New Chapter for Exchange Groups

Discussions focused on how artificial intelligence (AI), blockchain, and tokenization are accelerating structural changes in markets. Shifts in investor behavior, the expansion of passive products, and geopolitical influences require exchanges to strike a balance between improving efficiency and maintaining market credibility. Participants generally agreed that exchanges are entering a new phase characterized by higher levels of integration and more frequent cross-border cooperation, underscoring the need to strengthen regulatory coordination and operational resilience.

• Synergistic Development of Private and Public Markets

Panelists noted the rapid growth of private markets and the decline in IPO activity, pointing out that the efficiency and flexibility of private capital have encouraged companies to delay going public. However, this trend also limits retail investors’ ability to share in corporate growth. The conclusion emphasized that private and public markets should be complementary, supported by tiered regulation, differentiated disclosure requirements, and growth board mechanisms to facilitate smoother transitions into public markets while improving liquidity and narrowing valuation gaps.

• The Historical Evolution of Exchanges

A keynote address reviewed the evolution of exchanges from the 16th century to the present, highlighting their enduring role in facilitating corporate financing, strengthening market trust, and promoting inclusive finance across different eras. In the face of technological waves such as AI and digital assets, exchanges must place greater emphasis on information transparency and investor education to maintain long-term market stability.

• Capital Markets for Growth Companies

An OECD systematic analysis of global Growth Markets indicated that while growth boards play a critical role for technology and innovation-driven enterprises, they commonly face challenges such as insufficient liquidity, limited analyst report coverage, and low investor awareness. The OECD recommended that, while maintaining key disclosure requirements, jurisdictions should adjust governance and financial regulations combined with promoting research coverage to support corporate expansion and enhance market attractiveness.

• The Role of Regulators in Market Development

Discussions centered on how to balance market innovation with investor protection. The rapid spread of investment information through social media, differences in cross-border regulation, and the emergence of new business models have made regulatory demands more complex. The consensus was that regulators must remain neutral, remove unnecessary barriers, and strengthen education and cross-border coordination to foster healthy market development.

• Feasibility of 24/7 Continuous Trading

Panelists noted that with advances in financial technology, the growth of crypto-assets, and the increasing prevalence of cross-time-zone trading by retail investors, demand for 24/7 markets has re-emerged. However, challenges remain in settlement, fund transfers, system resilience, and regulation, particularly in the absence of central bank digital currencies or high-quality stablecoins, as weekend trading is still constrained by traditional banking systems. While blockchain and tokenization can enhance settlement efficiency, issues such as prefunding requirements and reduced liquidity persist. The key lies in building fully digitalized end-to-end processes. Overall, while 24/7 markets may enhance liquidity and participation, they also entail higher operational and regulatory costs, requiring prudent planning for future development.

• Convergence, Divergence, and Future Development of T+1

The successful implementation of T+1 settlement in North America has heightened global attention to the benefits of accelerated settlement, including reduced margin requirements, enhanced risk management, and improved capital efficiency. However, inconsistencies in settlement cycles across cross-border markets have increased operational costs. Europe has initiated legal adjustments, while Asia’s diverse markets have resulted in uneven progress. The discussion concluded that T+1 is a global trend, but moving toward T+0 will require careful consideration of operational costs, technological capabilities, and financial stability.

• New Positioning and Financialization of Gold Markets

Türkiye, Indonesia, and Egypt shared their institutional frameworks for promoting gold digitalization and ETFs, aiming to channel large volumes of privately held gold into the financial system through financial instruments to enhance liquidity and transparency. The conclusion highlighted that gold is evolving from a traditional safe-haven asset into a financial product with settlement, investment, and cross-border circulation functions.

• Regulatory Frameworks for Tokenized Securities

Under the principle of “same risk, same regulation,” tokenization does not change the fundamental nature of assets and therefore should remain subject to existing securities regulations. Some trading platforms offering so-called “tokenized stocks” have caused investor confusion, underscoring the need for clearer regulatory definitions. The conclusion emphasized that tokenization initiatives should be led by regulated institutions to maintain market order and prevent regulatory arbitrage.

• The Impact of AI on Market Operations and Supervision

International exchanges have increasingly adopted AI to support supervision, risk management, and daily operations, while also facing risks related to data authenticity, model transparency, and deepfake technologies. Panelists broadly agreed that while AI will continue to drive market innovation, robust governance frameworks and compliance processes are essential to maintaining market trust. In addition, they highlighted the growing importance of investor awareness initiatives.

In summary, the WFE Istanbul Annual Meeting highlighted that global capital markets are undergoing a transformation centered on innovation. Exchanges and regulators worldwide are focusing on leveraging technology to strengthen market functions, particularly in areas such as tokenization, artificial intelligence, data governance, and the digitalization of market infrastructure, with the aim of enhancing trading and settlement efficiency, strengthening supervisory tools, and further supporting sustainable and inclusive finance.

Against this international backdrop, the TWSE has actively aligned with global trends, continuing its efforts in digitalization, product innovation, and the optimization of trading mechanisms, and showcasing related initiatives at this year’s Annual Meeting. In particular, the comprehensive development of the ETF ecosystem highlights the Taiwanese capital market’s forward-looking planning and sustained commitment to product innovation and investor education. 

Looking ahead, the TWSE will build on the outcomes of this international exchange, continue to promote innovative and diversified products and services, strengthen cross-border connectivity, and expand investor education, thereby enhancing market resilience and overall competitiveness, alongside steadfastly advancing toward the policy objective of positioning Taiwan as an Asian Asset Management Center.