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Taiwan: Two-Week Ban Was Imposed on Short Selling

(Oct. 15, 2008) It was reported on October 1, 2008, that Taiwan's Financial Supervisory Commission (FSC) had imposed a ban on short selling of borrowed securities and selling on margin for two weeks, until October 14. The FSC had tightened short selling rules effective September 30, 2008 (to last until December 31, 2008), limiting the combined outstanding amount of short sales of borrowed securities and securities on margin to 10 percent of a company's outstanding stock. The previous cap was 25 percent. In addition, in place of a ten-percent limit, a new cap of one percent of outstanding stock of a listed company was imposed on the amount of short sales of borrowed securities. After the tighter rules failed to prevent a major downturn in the Taiwan stock market, however, the FSC decided on the two-week complete ban on short selling. (Taiwan Imposes Total Ban on Short-Sales for Two Weeks, XINHUA, Oct. 1, 2008, LEXIS/NEXIS, News Library, Most Recent 90 Days File.)