Taiwan’s Financial Supervisory Commission said on 6 November that it will cap daily intraday sell orders of borrowed shares at 3% of a stock’s 30-day average trading volume, down from 30%, from 9 November. The change is set out in the commission’s press release. By our arithmetic, that is a 90% cut in the cap. The minimum margin for short sales of listed and over-the-counter stocks rises to 130% from 90%.
The same day, the committee of the NT$500 billion (US$15.26 billion) National Financial Stabilization Fund authorised a market intervention, Focus Taiwan reported, after the Taiex closed down 4.51% at 39,701.64. Focus Taiwan said it will be the fund’s 10th intervention since it was set up in 2000. Earlier in the session, TSMC opened at its 10% limit-down price.
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The key insight: As we read it, Taiwan answered the week’s 12.19% Taiex fall with two levers at once: a 90% cut in the intraday cap on borrowed-share selling from 9 November, and authority for the NT$500 billion stabilization fund to buy, against foreign net selling of about 3.0 times that sum since 1 October.
The FSC release lists five measures, effective 9 November. First, the 3% cap on intraday borrowed-share sell orders. The release exempts securities firms’ hedging for warrants, exchange-traded notes, structured products and equity derivatives, liquidity providers for beneficiary certificates, futures dealers making markets in stock options or stock futures, and securities firms acting as stock market makers.
Second, the 130% minimum margin for short sales. Third, investors may, with their broker’s or securities finance company’s consent, top up margin with other liquid collateral, such as foreign securities held through sub-brokerage. Fourth, the FSC encourages listed companies to consider share buybacks, which are already filed electronically. Fifth, it encourages companies to hold investor conferences on their operations and outlook.
The release gives no end date. It says the commission will keep watching international conditions and the domestic market and adjust the measures as appropriate, and asks investors to respond rationally.
Net sales of Taiwan shares by foreign institutional investors in October and so far in November, against the NT$500 billion size of the National Financial Stabilization Fund. Figures from the fund committee’s 6 November statement as reported by Focus Taiwan; the total is our arithmetic.
What Was Posted on X
JUST IN: Taiwan to impose sweeping short-selling restrictions starting Monday after its stock market suffers worst weekly decline since 2001.
Polymarket’s post at 17:41 UTC on 7 November saying Taiwan will impose sweeping short-selling restrictions starting Monday after its stock market’s worst weekly decline since 2001. The Financial Supervisory Commission statement this piece reports set the start date as 9 November, which is that Monday; the comparison with 2001 is Polymarket’s and is not in the sources this piece cites.
Why the Fund Stepped In
In its statement, as reported by Focus Taiwan, the fund committee said that given “the continued high degree of uncertainty in the global political and economic landscape” it had authorised its executive secretary to use funds as needed to smooth volatility. The committee said the Taiex lost 12.19% this week, trailing only the Philadelphia Semiconductor Index’s 15.7% decline, and that Taiwan’s market has been highly correlated with that index.
The committee said foreign institutional investors sold a net NT$994.32 billion of Taiwan shares in October, the highest monthly net sale on record, and a net NT$524.4 billion so far in November. By our arithmetic, that is NT$1,518.72 billion since 1 October, about 3.0 times the fund’s NT$500 billion.
Focus Taiwan said analysts attributed the sell-off to fears of restrictions on AI data centre development after the US midterm elections. The Taiex was 20.55% below its 6 October intraday high of 49,968.92, it reported. The fund’s last intervention ran from 9 April 2025 to 12 January 2026, after US reciprocal tariffs were announced.
Update, 6 Nov, 17:52 UTC: South Korea eases margin-loan rules. South Korea’s government said on 6 November it will waive, for three months starting 9 November, the requirement that brokerages maintain collateral ratios on margin loans, Seoul Economic Daily reported; MoneyToday and SBS reported the same three-month exemption from the 140% collateral requirement. It is the first such forced-selling reprieve since July 2022, according to Seoul Economic Daily. The measure lets brokerages adjust the 140% requirement at their own discretion and does not block forced selling itself; brokerages limited themselves to lowering collateral ratios by 10 to 20 percentage points only for applicants and deferring forced selling by one day, the paper reported. Margin loan balances stood at 28.6446 trillion won on 4 November, down 25.9% from the 24 June peak of 38.6328 trillion won, according to the Korea Financial Investment Association, as cited by Seoul Economic Daily. We have not read the Financial Services Commission’s own release.
As we read the FSC release, the 3% cap targets one channel of selling, borrowed shares sold intraday, and exempts the market makers and hedgers who keep derivatives and warrants priced.
As we read the fund committee’s statement, the trigger it names is the correlation with the Philadelphia Semiconductor Index, which tied a domestic market to a US chip sell-off that analysts linked to AI data centre politics.
As we read the numbers, the fund’s NT$500 billion is a third of the foreign net selling since October that the committee itself reports, so its size is small next to the selling it is meant to offset.
Fund committee statement, as reported by Focus Taiwan
“it was necessary for the stabilization fund to step in now”
Three Implications
FOR SHORT SELLERS From 9 November, intraday borrowed-share sell orders are capped at 3% of 30-day volume and short-sale margin rises to 130%, the FSC says.
FOR LISTED COMPANIES The FSC says it encourages buybacks and investor conferences.
FOR THE STABILIZATION FUND Its committee authorised the executive secretary to use funds as needed, Focus Taiwan reported.
The framework says: “You cannot ship silicon without foundries.”
As we read it, the foundry layer the framework places near the bottom of the stack is listed in Taipei, and the fund committee says that market has moved with the Philadelphia Semiconductor Index. The framework does not discuss Taiwan’s regulators, short selling or this week’s fall.
What Is Not Established
The FSC release does not say how much borrowed-share selling there was before the change, and the fund statement does not say how much the fund will buy or for how long. South Korea announced its own measure the same day; see the update below. We did not contact the FSC or the fund.
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From 9 November, intraday sell orders of borrowed shares in Taiwan are capped at 3% of 30-day average volume, down from 30%, and the minimum short-sale margin is 130%, up from 90%, the FSC says. Foreign net selling since 1 October, as reported by the fund committee, comes to about 3.0 times the fund that has been authorised to step in.
A note on sourcing. The short-selling and margin measures are from the Financial Supervisory Commission’s Chinese-language press release of 6 November 2026, paraphrased in English by us. The stabilization fund decision, Taiex figures and foreign selling totals are from the fund committee’s statement as reported by Focus Taiwan (CNA). The 90% cut and the 3.0 times ratio are our arithmetic. We did not contact the FSC or the fund.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
