Market Rumors of Margin Call Tsunami! Exchange Clarifies: Overall Maintenance Ratio at 175%, Well Above Warning Level

Certain media outlets reported yesterday (27th) that the overall margin maintenance ratio in the stock market had dropped to 143%, potentially triggering a large-scale margin call 'tsunami'. In response, the stock exchange issued a formal clarification today (28th), emphasizing that the 143% figure resulted from incomplete calculations that failed to account for full-margin trading factors.

The exchange explained that the market-wide margin maintenance ratio is calculated on a consolidated basis, combining both margin buying and short selling (referred to as 'full-account' credit trading), and includes both listed and over-the-counter securities. As of market close on July 27th, the overall credit trading maintenance ratio stood at approximately 175%, significantly above the statutory margin call threshold of 130%. Additionally, the standalone margin maintenance ratio remains above the initial maintenance level of 166%. The reported 143% figure likely stems from an incomplete assessment that omitted key components of full-account credit trading.

On July 27th, the total amount subject to margin calls and forced liquidations accounted for less than 0.1% and 0.03% of total market turnover, respectively—significantly lower than levels observed during last year’s (2025) equivalent tariff incident. From the beginning of 2026 to date, both the value and number of credit transaction liquidations have remained within safe ranges relative to overall trading volume and the number of market participants.

Furthermore, according to the 'Operational Guidelines for Securities Firms Conducting Securities Margin Trading and Short Selling', securities firms must follow a formal notification and top-up process before initiating any forced liquidation. When an investor’s maintenance ratio falls below 130%, the broker must notify them after market close on the same day (T-day). Investors are then given two business days from the date of notification to deposit additional collateral. If the investor fails to top up and the maintenance ratio remains below 130%, the broker may proceed with forced liquidation on the next business day (T+3). However, if the overall maintenance ratio recovers to 130% or above before liquidation, the action is suspended. If the ratio rebounds to 166% or higher, the margin call record is canceled.

As of 15:30 today, the total amount of investor defaults reported by securities firms exceeded NT$37 million, but after netting offsetting positions, the net default amount was only approximately NT$2 million. Defaulting investors are not concentrated among younger demographics, and no significant anomalies have been observed. Overall market settlement operations remain orderly.

The exchange urges investors not to believe unverified market rumors or panic unnecessarily. Amid market volatility, investors should remain rational and carefully assess their personal risk tolerance and financial situation.