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What is the Taiwan Stock Exchange?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Images By: Gringos, Scanrail, Chang-Chih Liao, Alan Wu
  • Last Modified Date: 26 August 2016
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The Taiwan Stock Exchange (TWSE) is a financial market in Taiwan designed to allow people to trade securities. It started operating in 1962, transitioning from a traditional open outcry system to a computerized trading system in 1993. The exchange is one among many closely watched Asian markets, as Taiwan is a highly active country economically and the performance of its markets is complicated by the tense relations between Taiwan and mainland China.

This exchange is located in Taipei 101, a major landmark in Taiwan's capital city. Two stock indexes are associated with the Taiwan Stock Exchange, the TAIX and TWSE. Both are used to track performance of the market as a whole by following the movements of key stocks. Market movements reflected in these indexes tend to filter through the market as a whole and can also be used as indicators about the health of Taiwan's economy, not just its stock market.

To be listed on the Taiwan Stock Exchange, companies must meet requirements set by the administrators of the exchange, including capitalization requirements. These are intended to weed out small or unreliable companies that would not generate profits for traders and could potentially destabilize the market. Companies are periodically reviewed to confirm they still meet the requirements and the Taiwan Stock Exchange may opt to delist companies if it finds they are no longer meeting the minimum standard.

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Traders on the exchange can work independently or represent trading firms. They must be licensed to trade on the stock market and some may be sponsored by employers through the licensing process, as they take a series of exams designed to test knowledge of the markets and trading practices. Traders who wish to represent people as agents will need to pass additional examinations, as higher responsibilities are associated with acting on behalf of someone else.

Performance on the Taiwan Stock Exchange, along with other large Asian markets, is typically reported worldwide. Financial publications provide the latest quotes, and websites often offer real time updates, allowing traders to see what is happening in other markets even when theirs are closed. Economists and investors around the world look at the performance of global markets to collect information about regional economies, stocks to watch, and the impact of political events on market performance. Some services offer subscription options so people can get reports on key events delivered by phone or email, allowing them to get information as soon as it is released.

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