Taiwan FSC Weighs High-Priced Stock Exemption Amid AI Share Volatility

Taiwan’s current watchlist and disposition-stock system is designed to address unusual short-term movements in trading volume, turnover or share prices. But as the AI boom drives up high-priced heavyweight stocks such as TSMC and MediaTek, gains reflecting underlying fundamentals can also trigger restrictions, prompting debate over whether the rules remain suited to current market conditions.

MediaTek’s recent designation as a disposition stock following share-price volatility prompted the Financial Supervisory Commission and Taiwan Stock Exchange to launch a comprehensive review. Regulators are considering an exemption that would prevent high-priced stocks with price-to-earnings ratios still within a reasonable range from automatically facing restrictions because of price volatility. No threshold, implementation date or applicable share-price level has been announced.