Short sales could cost investors more: TWSE

Focus Taiwan
Date: 2016/04/30
By: Tien Yu-pin and Frances Huang

Taipei, April 30 (CNA) When investors borrow securities for a short sale purpose, they can spend more than they had previously anticipated, according to the Taiwan Stock Exchange (TWSE).

Since 2003, Taiwan has been allowing securities borrowing and lending (SBL) in a bid to give investors more flexibility to map out their investment strategies.

Through SBL, investors are able to short stocks, hedge risks or return stocks they had previously borrowed. The TWSE and brokerages serve as the principal securities lenders, and investors are able to borrow securities through competitive bids or negotiations under the current SBL system.

The TWSE, which operates the local main board, said that investors have to pay fees for competitive bids or negotiations and the fees will not be included into the deposits they have to place with the lenders. The deposits could hit as much as 90 percent of the borrowed stock’s value.     [FULL  STORY]

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