Taiwan Stock Exchange

Taiwan Stock Exchange
Name	Taiwan Stock Exchange
Native name	臺灣證券交易所
Type	Stock exchange
Location	Taipei, Taiwan
Founded	23 October 1961
Currency	New Taiwan dollar
Indices	TAIEX

Contents

History
Operations and Trading
Listed Companies
Indices
Regulation and Governance
See also

Taiwan Stock Exchange. The Taiwan Stock Exchange is the principal securities trading venue in Taiwan, operating as a centralized marketplace for equity and bond transactions. Formally established in the early 1960s, it has grown to become a cornerstone of the East Asian financial landscape and a critical component of Taiwan's economy. Its benchmark index, the TAIEX, is a widely watched indicator of market performance and investor sentiment in the region.

History

The exchange was officially inaugurated on 23 October 1961, following the enactment of the Securities and Exchange Act by the Government of the Republic of China. Its creation was part of broader post-war economic development plans, influenced by American financial models and advice from institutions like the International Monetary Fund. Early trading was conducted via manual open outcry on the floor of its original building on Songjiang Road in Taipei. A major technological leap occurred in the late 1980s with the introduction of a fully computerized trading system, which dramatically increased efficiency and capacity. The market experienced significant growth during the Taiwanese economic miracle, with the TAIEX reaching a historic peak in 1990. Subsequent developments included the establishment of the GreTai Securities Market for over-the-counter trading and the launch of futures contracts on the TAIEX by the Taiwan Futures Exchange.

Operations and Trading

Trading sessions are held on weekdays, with a pre-market opening call auction followed by continuous electronic trading. The exchange utilizes the FIX protocol for order routing and maintains robust clearing and settlement systems through the Taiwan Depository and Clearing Corporation. Order types include standard limit orders and market orders, with circuit breaker mechanisms activated during periods of extreme volatility. Margin trading and short selling are permitted under regulations set by the Financial Supervisory Commission. The exchange also facilitates block trades and after-hours trading for institutional investors. Settlement follows a T+2 cycle, with all transactions cleared in New Taiwan dollar.

Listed Companies

The exchange hosts a diverse array of corporations, with a particularly strong concentration in the technology sector. Leading global firms such as Taiwan Semiconductor Manufacturing Company, Hon Hai Precision Industry, and MediaTek are primary constituents. Other significant sectors include financial services, represented by entities like Cathay Financial Holding and Fubon Financial Holding, and traditional manufacturing. Listing requirements mandate a history of profitability, minimum capital levels, and adherence to stringent corporate governance standards. The market is divided into main board listings and the Taiwan Innovation Board for emerging growth companies. Many listed firms maintain American depositary receipt programs on exchanges like the New York Stock Exchange.

Indices

The flagship index is the TAIEX, a capitalization-weighted index of all listed common stocks. Sector-specific and thematic indices are also published, including the TPEx indices for the over-the-counter market and the FTSE TWSE Taiwan Index Series developed in collaboration with FTSE Russell. The MSCI Taiwan Index is a critical benchmark for international fund managers and exchange-traded fund providers. These indices are used for portfolio benchmarking, derivative product development, and economic analysis by institutions like the Central Bank of the Republic of China.

Regulation and Governance

The primary regulator is the Financial Supervisory Commission, which oversees market activity, enforces the Securities and Exchange Act, and investigates insider trading and market manipulation. The exchange itself operates as a corporatized entity under the supervision of the Ministry of Finance. Its internal governance involves a board of directors and various committees that set listing rules and trading protocols. Key regulatory partners include the Taiwan Futures Exchange and the GreTai Securities Market. The legal framework is influenced by Securities and Exchange Commission principles and international standards from bodies like the International Organization of Securities Commissions.