Taiwan relaxes securities lending rules
According to reports in the local press, Taiwan is set to relax its securities lending rules as of January 1 2016.
This has been done in an effort to improve the nation’s capital markets according to the Financial Supervisory Commission (FSC).
The change will allow securities lending between individual investors, securities finance companies and securities brokerages. Retail investors are only currently allowed to deal borrow securities from the Taiwan Stock Exchange, brokerages and other financial institutions.
The new policy is not designed to promote short-term speculative trading, the Taipei Times reports that the Commission as saying, but to give investors the option to lend out idle securities to financial institutions in exchange for interest earnings.
Securities borrowers will also be able to extend their loans twice, with the total duration of the loan limited to less than 18 months. The Commission is also debating removing the cap on margin loans to individual investors.
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