萬國法律事務所

Global financial turmoil had a significant impact on Taiwan's stock market in September, and to mitigate market volatility, the Financial Supervisory Commission (FSC) announced the temporary suspension of the sale of securities borrowed through the securities borrowing and lending (SBL) system, and short sales of securities through the margin trading system (i.e. total suspension of short sales), for the period from 1 October to 31 December 2008 with the suspension to be re-evaluated at an appropriate time during that period.

After carefully reassessing the situation, the FSC decided that beginning on 28 November 2008, investors are once again permitted to short-sell securities through the margin trading system and sell securities borrowed through the securities borrowing and lending (SBL) system, at prices at or above the previous day's securities market closing prices (i.e. short sales below the previous day's closing prices are still temporarily prohibited).

However, following such measures will remain in effect in order to relax short selling restrictions in an orderly manner and stabilize the stock market:

(1) The ceiling for the balance of short sales of any given security plus the balance of sales of that security borrowed through the SBL system as a percentage of the total number of exchange-listed (or OTC-listed) shares or beneficial units of that security was lowered from 25 percent to 10 percent.

(2) The ceiling for the balance of sales of any given security borrowed through the SBL system as a percentage of the total number of exchange-listed (or OTC-listed) shares or beneficial units of that security was lowered from 10 percent to 1 percent.

(3) The ceiling `for the volume of intraday brokerage sale orders for any given security borrowed through the SBL system as a percentage of the total number of exchange-listed (or OTC-listed) listed shares or beneficial units of that security was lowered from 3 percent to 0.3 percent.