The Taiwan Monthly

Trading Policies

TWSE gains ground in a sustainable financial ecosystem

The TWSE market making mechanism (the “MMM”) for listed stocks was realized on June 30, 2021. Target stocks were screened based on quantitative and qualitative criterion, drawing the attention of securities dealers to participate in market-making and trading. The MMM enhances the trading volume of quality stocks with low liquidity, overachieved targets and boosted trading value over 40% compared to pre-implementation in 2021. While the overall market trading value in the same period remains flat, the MMM indications have most certainly attributed to the upward trend momentum of less actively traded stocks.

 

The MMM highlights from July 1, 2022 include ESG performances as a new value-added factor in screening and incentivizing MMM targets; this will fuel management teams to have greater adherence to the values of ESG and corporate governance. Mechanism participants, stock market makers and liquidity providers are active MMM participants. The MMM purpose is specific; it is to increase matching opportunities by market makers through quoted prices. The TWSE goal is always to augment transaction opportunities and efficiency.

 

The TWSE will diligently track implementation results, fine-tune the stock screening criteria of market-making targets, plus the qualifications of stock market makers and liquidity providers on a rolling basis. The TWSE also supports that stock market makers should provide quoted prices to liquidity providers for trading, the objective of which is to increase target stocks’ liquidity. The focus to invest funds in green industries will create greater market synergy and envision the collective aim of capital market sustainable development. The strategic goal of “Active Trading Market” in the “Capital Market Roadmap” is to fulfill, and be part of, sustainable finance, its values and mission.

For further inquiries, please contact Ms. Liu at 1140@twse.com.tw