【Complete Guide to New Trading Suspension Rules】From 10 Days to 5, Matching Every 2 Minutes! TSE’s Largest Overhaul in Nearly 30 Years – All 5 Changes Explained

Taiwan's stock trading suspension system is undergoing its most significant overhaul in nearly 30 years. On the 3rd, the Taiwan Stock Exchange (TSE) announced new regulations that will take effect on August 10, shortening suspension periods, increasing matching frequency, and revising the criteria for designating high-priced stocks as monitored securities. The TSE estimates that market liquidity for suspended stocks could increase by approximately 1.5 times after the new system is implemented.

Suspension System Revision! Why the Major Update? Old Rules No Longer Fit High-Priced Stock Trading Realities

The current suspension measures have been in place since 1995, primarily targeting stocks with明显 abnormal price movements or trading volumes. By reducing matching frequency and restricting trading methods, the system aims to alert investors to potential risks. However, as the number of stocks priced above TWD 1,000 has increased, the existing price-difference thresholds have failed to adequately reflect the characteristics of high-priced stocks. As a result, some stocks with sound fundamentals may still trigger thresholds due to short-term price fluctuations.

In the first half of this year, the TSE re-examined the system, referencing market structure, past enforcement outcomes, and external feedback, ultimately deciding to adjust suspension durations, matching times, and high-priced stock classification standards.

Shorter Suspension Periods, Faster Matching

Under the new rules, the restriction period for general stocks—whether newly or repeatedly placed under suspension—will be reduced from 10 trading days to 5 trading days. If a stock is designated as a monitored security due to an excessively high day-trading volume ratio during the evaluation period, the suspension period will be shortened from 12 trading days to 7 trading days.

Trading matching mechanisms will also be relaxed simultaneously. Previously, suspended stocks might be matched only once every 5 or 20 minutes. Going forward, ordinary trading stocks that are newly or again suspended will generally be matched approximately every 2 minutes, reducing investors’ waiting time for order execution.

Higher Thresholds for High-Priced Stocks to Be Flagged

The alert threshold for high-priced stocks will now adopt larger price increments. For stocks with closing prices above TWD 1,000, the price difference over the most recent six trading days must reach TWD 300 to meet the criteria. For stocks priced above TWD 2,000, the threshold increases by an additional TWD 150 for every TWD 1,000 increment. For example, stocks priced between TWD 2,000 and 3,000 must show a six-day price difference of TWD 450 to potentially trigger the standard.

Under the old system, the price-difference threshold increased by only TWD 25 for every TWD 500 rise in stock price. Because the incremental increase was relatively limited, high-priced stocks were prone to being listed as monitored due to normal price fluctuations. By widening both the price tiers and the price-difference thresholds, the TSE aims to make the assessment method more aligned with Taiwan’s current stock price structure.

Biannual Review Mechanism Established; Old Cases Apply New Rules

In addition to this revision, the TSE will establish a regular review mechanism, reassessing monitored stock and suspension policies every six months based on stock price distribution, trading patterns, and changes in domestic and international financial markets.

Regarding the transition between old and new systems, stocks already under suspension for five trading days before August 10 will be allowed to resume normal trading on that day. Similarly, stocks under enhanced day-trading suspension that have completed seven trading days will also be released. Stocks that haven’t yet met the new duration requirements will continue to be suspended until they reach five or seven days, without needing to complete the original 10- or 12-day period.

Matching Times Adjusted Immediately for Currently Suspended Stocks

Matching intervals will be adjusted immediately upon the new system’s effective date. Except for special cases such as stocks with changed trading methods or those using segmented auction pricing, all other securities currently under suspension will shift to being matched approximately every 2 minutes.

According to the China Times, analyst Tsai Ming-han pointed out that in the past, stocks often experienced sharp price swings when entering or exiting suspension, due to sudden changes in liquidity. With shorter suspension periods and faster matching, such volatility concentrated around system transition points may ease, offering better protection for investors holding physical shares. However, if speculative trading in individual stocks does not cool down, conditions may still be repeatedly triggered, potentially leading to consecutive suspensions.

Five Key Changes in the New Trading Suspension System

| Change Item | Old System | New System | |------------------|------------------|------------------| | 1. Shortened General Suspension Period | First or repeated suspension: 10 trading days | Uniformly shortened to 5 trading days | | 2. Reduced Day-Trading Enhanced Suspension | 12 trading days for high day-trading volume ratio | Shortened to 7 trading days | | 3. Faster Matching Speed | Matched approximately every 5 or 20 minutes depending on suspension status | Generally matched approximately every 2 minutes | | 4. Higher Alert Threshold for High-Priced Stocks | Price difference threshold increases by TWD 25 per TWD 500 stock price increase | Above TWD 1,000: 6-day price difference ≥ TWD 300; above TWD 2,000: +TWD 150 per TWD 1,000 increment | | 5. Establishment of Regular Review Mechanism | No fixed review cycle | Reviewed every six months for monitored and suspension rules |