Night Session of Taiwan Index Futures Won't Trigger 'Margin Calls,' but Margin Requirements Still Require Attention! FSC Introduces Two Services to Help Manage Risk

Recent financial market volatility has intensified, particularly as the Taiwan Stock Index reaches higher levels, causing Taiwan Index Futures (TXF) to swing by hundreds or even thousands of points in a single session. Although the current exemption mechanism prevents automatic liquidation ('margin call') during night trading, the FSC has directed the Taiwan Futures Exchange and futures brokers to implement two new services—night session risk alerts and account information services—to help traders proactively manage account risks.

Under current regulations, when investors trade futures or options products exempt from mandatory liquidation, futures brokers are not required to issue margin calls even if the account equity falls below the required maintenance margin during night sessions. However, to strengthen risk awareness, investors can now pre-arrange with their brokers to receive SMS or other notifications when their account holds only such exempt products and the night session equity drops below maintenance margin levels.

Additionally, considering that night session price movements may impact the following day's trading, brokers now provide simulated account equity and maintenance margin figures based on night session closing prices. This allows traders to assess their margin status before the daytime session opens, enabling timely fund deposits or position adjustments to reduce post-open risk exposure.

For example, on the evening of Friday, June 5, unexpectedly strong U.S. non-farm payroll data dampened expectations of a Federal Reserve rate cut, cooling market sentiment. The Taiwan Index Futures night session plunged sharply, accelerating its fall by over 4,000 points near session close due to liquidity drying up. Retail-traded 'Mini-Taiwan Index' and TSMC futures briefly hit limit-down prices. Many investors spent the entire weekend calculating how much capital they needed to deposit to avoid margin calls when markets reopened on Monday.

The FSC reminds futures traders to continuously monitor their open positions and account equity fluctuations, prudently manage trade sizes, and maintain sufficient margin deposits. Futures brokers are also urged to promptly track client account risks, enhance alert systems, and enforce robust risk controls to protect investor interests and ensure market stability.