Taiwan Eyes Q2 Launch for Foreign-Currency Margin Financing on U.S. Stocks

Taiwan’s Financial Supervisory Commission is considering allowing qualified securities firms to offer foreign-currency margin financing through their sub-brokerage businesses, enabling clients to borrow in foreign currencies to buy U.S. shares. The proposal would broaden brokers’ overseas investment services and reduce investors’ upfront cash requirements, while introducing added leverage and currency risks in a market without Taiwan-style daily price limits.

The FSC’s Securities and Futures Bureau plans to make as many as 630 U.S.-listed stocks and 300 exchange-traded funds eligible in the initial phase. To contain volatility and default risks, financing would be capped at 50% of the transaction value and accounts would be subject to a 160% maintenance ratio. The framework remains under review and could take effect as early as the second quarter of next year.