Taiwan Stocks Poised for "One Share ( 1000 Shares ) Changed to 1 Share" to Align with International Standards? FSC Commits to Reform Report Within One Month

Financial Supervisory Commission Chair Peng Jinlong hints at initiating an evaluation of transitioning from the “one lot equals 1,000 shares” system to a “one share per lot” system, promising a report within a month. This change could align Taiwan’s stock market with international standards.

(Background: Franklin Templeton teams up with Ondo Finance to launch a “tokenized ETF,” supporting 24/7 trading within crypto wallets)

(Additional context: North American banking giant BMO partners with CME and Google Cloud to launch a “tokenized cash” platform targeting real-time settlement 24/7)

How much does one share of TSMC (2330) cost? With the current stock price around NT$1,850, buying one lot (1,000 shares) costs NT$1.85 million. For small investors, just purchasing one “national treasure” stock requires nearly two million NT dollars, creating a significant entry barrier.

The Legislative Yuan’s Finance Committee recently questioned this issue, calling for the abolition of the longstanding “one lot equals 1,000 shares” system and adopting a “one share per lot” approach to fully align with international standards.

Peng Jinlong and Taiwan Stock Exchange Chairman Lin Hsiu-ming recently agreed during a hearing to initiate an assessment, promising to submit a written report within a month on the feasibility of the reform and the possibility of allowing fractional share day trading.

Disadvantages of Fractional Share Trading

Although the current system allows for “intraday fractional share” trading, the dual-track system of large caps and fractional shares still has discrepancies in pricing, matching speed, and order logic, leading to reduced market transparency and fairness, and failing to truly lower retail investors’ entry barriers.

Additionally, issues such as minimum handling fees, inability to day trade, and more complicated procedures for receiving shareholder souvenirs need attention.

Peng Jinlong stated that the core of market management is “fair treatment of every trader.” If conditions are the same, equal treatment should be given. The TWSE will consider whether to unify trading units to one share.

The US Standard: One Share as a Trading Unit

Internationally, the US stock market has long adopted “one share” as the basic trading unit, with most brokers supporting fractional trading, offering the highest flexibility globally. Since its establishment, Taiwan’s stock exchange has maintained the tradition of “1,000 shares” per lot.

However, reform is not straightforward. According to the Economic Daily, three major technical and social challenges exist:

First, the underlying system of Taiwan’s stock market is built around the “1,000 shares” core. Switching to a one-share system would cause trading volume and order counts to increase exponentially, requiring system rewrites and upgrades.

Second, current market surveillance mechanisms for warning stocks and disposal stocks are based on “lots.” The anti-fraud system would need to be reconfigured after reform.

Third, investors are accustomed to “one lot equals 1,000 shares,” and user perception would need to be rebuilt.

Jian Lichung, Chairman of the OTC Center, also pointed out that switching entirely to one-share trading could lead to overly fragmented trading units for low-priced stocks, increasing operational burdens.