Nasdaq 23-Hour Trading Sparks Taiwan Capital Outflow Fears, Regulator Forms Task Force

The Nasdaq Stock Exchange has announced plans to extend its trading hours to 23 hours, raising concerns that this move could divert capital flows away from the Taiwan stock market. Today, Peng Jin-long, Chairman of the Financial Supervisory Commission (FSC), stated that the FSC has established a special task force to conduct multi-faceted deliberations on capital market-related issues. The commission will closely monitor the impact and effectiveness of the new U.S. system once it is implemented. Should Taiwan consider adjusting its trading hours, Peng emphasized that broad social consensus must first be reached before any further measures are pursued.

The primary motivation behind Nasdaq’s extension of trading hours is to accommodate global investor demand and facilitate cross-time zone trading. As the time gap between the U.S. and Asian markets narrows, investors increasingly seek the ability to trade at different times of the day to avoid information asymmetry caused by time differences. Other major exchanges, such as the New York Stock Exchange (NYSE) and the Hong Kong Exchanges and Clearing Limited, have either implemented or are considering extending their trading sessions in an effort to enhance market liquidity and attract more international capital.

In comparison, the Taiwan Stock Exchange operates from 9:00 a.m. to 12:00 p.m. and from 1:00 p.m. to 4:00 p.m., creating a time difference of approximately 12 to 15 hours with the U.S. market. If the U.S. market extends its trading hours to 23 hours, the Taiwan market will have already closed before the U.S. market opens. This may lead investors to choose to trade when the U.S. market opens, potentially resulting in a short-term outflow of capital. More importantly, extended trading hours could increase market volatility. In the event of information asymmetry or sudden incidents, price fluctuations may be exacerbated, further affecting the investment risks associated with the Taiwan stock market.

In response to these risks, FSC Chairman Peng Jin-long noted that the special task force will examine various aspects, including market structure, investor protection, and risk management. The task force will collect actual data following the U.S. trading hour extension to evaluate its impact on Taiwan’s capital market. It will also maintain communication with other international regulatory bodies to ensure the stable operation of the Taiwan market. Should a decision be made in the future to adjust the trading hours of the Taiwan stock market, the FSC will first solicit opinions from investors, listed companies, and other relevant stakeholders to ensure that the adjustment measures are backed by widespread consensus.

In the long term, adjustments to market hours involve more than just capital flows; they also pertain to investor education, information transparency, and technical upgrades to trading systems. To align with global market trends, Taiwan must consider not only trading hours but also strengthen cross-border investment regulations, improve information disclosure mechanisms, and refine risk monitoring and emergency response protocols to maintain the market’s international competitiveness. The FSC stated that it will continue to monitor the implementation and effectiveness of the new U.S. system and make corresponding adjustments based on market changes to ensure the stability and healthy development of Taiwan’s capital market. (Source: Central News Agency)