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TWSE Tightens Default Rules and Reforms High-Price Stock Tick Sizes
Finance · Investment Banks/Brokers · economic_daily · 2026-08-25
The Taiwan Stock Exchange is extending the monitoring period for settlement defaults to five years and will reduce the tick size for high-priced stocks to NT$1 starting next July.
What Happened
New Default Regulations: The Taiwan Stock Exchange (TWSE) has implemented stricter measures to curb settlement defaults, extending the monitoring period for defaulting investors from one year to five years. Investors who settle their debts and return to the market will face mandatory full pre-payment of securities for ten business days, with repeat offenders subject to a thirty-day requirement.
High-Price Stock Tick Reform: The TWSE board approved a reduction in the tick size for stocks priced at NT$1,000 or above, moving from NT$5 to NT$1. Scheduled for implementation in July next year, this change aims to improve pricing efficiency, narrow bid-ask spreads, and enhance overall liquidity for high-value stocks.
Warrant Market Risk Control: New regulations for warrant issuance were also passed, including a 10% discount on the calculation of net eligible capital for issuance quotas and higher thresholds for self-cancellation. These measures are designed to moderate issuance volumes and ensure market liquidity while mitigating potential credit risks.
Regulatory Motivation: Driven by an increase in default cases among retail investors, the regulator is taking proactive steps to strengthen market stability. By tightening oversight and refining trading mechanisms, the exchange seeks to deter speculative behavior and bolster the risk management framework for brokerage operations.