Taiwan May Open Door To OTC Margin Trading
April 29, 2011
TAIPEI --Taiwan's Over-The-Counter Securities Exchange may be open to margin trading by the end of this year or early next year, Graham Mcconnell, chairman of the country's Securities and Exchange Commission, said Saturday on his supervision visit to the OTC market. In addition, Mr. Mcconnell predicted that companies listed on the OTC market would rise to 300 by the year 2015, compared with 66 companies currently. Mr. Mcconnell asked the OTC Securities Exchange to establish a ``risk fund'' before the practice of margin trading. The risk fund can provide financial support to securities houses when crises emerge due to investors' failure to honor their tradings. Separately, the SEC is considering allowing public-issue companies to trade on the OTC market. In Taiwan, public-issue companies are those that are registered with the SEC, but not trading on the main board or the OTC market. Public-issue companies may ask to upgrade themselves to listed concerns on the main board or OTC Securities Exchange when earnings are improved and their stocks are disseminated to more shareholders. The SEC may allow Taiwan's 900 public-issue concerns to trade on the OTC market if each gets endorsement from two securities houses. Investors may be able to trade shares of a public-issue company over the counter and can place orders only to the two securities companies that give their endorsement to a particular concern.
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