Local brokerages would be allowed to handle odd-lot intraday trading for clients from the second half of next year at the earliest, as the transaction system makes big-ticket stocks affordable for individual investors, the Financial Supervisory Commission said on Thursday.
As brokerages are not required to handle odd-lot intraday trades, the commission expects only some securities houses to roll out the service in the early stages, Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told a news conference.
“We will focus on launching a continuous trading mechanism in March next year. If everything goes smoothly, we will approve odd-lot intraday trading later next year,” Tsai said.
The commission has proposed that odd-lot and standard trading operate separately, so investors would need to use separate information systems for market orders, she said.
The commission would discuss with the Taiwan Stock Exchange (TWSE) whether odd-lot trading should be integrated into the continuous trading system, she added.
Compared with the current call action system, which matches buy and sell orders and generates one trading price over five seconds, the continuous trading mechanism would match orders without delay and thus generate multiple trading prices, Tsai said.
Odd-lot trading would allow investors to purchase any number of shares less than the standard unit of trading, or 1,000 shares, significantly lowering the threshold at which investors could buy high-priced stocks.
For example, 1,000 shares of smartphone camera lens maker Largan Precision Co (大立光), which yesterday closed at NT$3,775, would cost an investor NT$3.77 million (US$119,607), which is a lot of money for younger investors, the commission said.
With odd-lot trading, they could spend just NT$3,775 for a single share, it said.
Odd-lot trades are already allowed in after-hours trading, but not in day trading, as some securities brokerages have expressed misgivings that investors and brokers might confuse the two systems, or worse, submit incorrect orders.
However, as odd-lot trading would boost daily turnover and give retail investors more choices, the commission would allow brokerages to adopt odd-lot intraday trading, Tsai said.
The TAIEX yesterday rose 0.19 percent to 10,328.28, with turnover of NT$101.47 billion, TWSE data showed.
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