Goodbye Saturday Securities Trading

For years, the securities and futures markets in Taiwan were the world’s only major bourses with Saturday trading – and not every Saturday at that. Several times a year when a public holiday falls on a Tuesday or Thursday, workers and students in Taiwan receive an additional day off (on that Monday or Friday, respectively) to give them the benefit of a four-day weekend. But in return the time has to be made up on a specified Saturday.

The irregularity of occasional Saturday trading immensely complicated the settlement process, especially for international investors relying mainly on automated systems. Besides creating additional costs, the disruptions in normal procedures caused by Saturday trading also “involved a large potential default risk,” says C.P. Liu, executive vice president at Fubon Financial and a co-chair of AmCham Taipei’s Capital Markets Committee.

After raising the issue repeatedly in the Chamber’s annual Taiwan White Paper – most recently in 2018 – the Committee was gratified when the authorities agreed to cancel trading on the working Saturdays, starting with this year.

Another Committee White Paper proposal from 2018 – to lift the requirement that offshore analysts must be chaperoned by locally licensed securities personnel when visiting professional investors in Taiwan – was also accepted. Securities firms considered the chaperoning requirement to be an unwarranted burden on their staff members, and particularly unnecessary given the knowledge and sophistication of Taiwan’s professional investors.

As the Committee noted in its 2019 White Paper chapter, the two positive responses from the government “send the encouraging message to the industry that the regulators recognize the importance of enhancing the competitiveness of Taiwan’s capital markets by aligning its practices with international standards.”