Taiwan Futures Firms' ANC Ratios Decline Amid Stock Market Boom; 10 Plan Capital Injections
As Taiwan's stock market heats up, the ANC ratio (Adjusted Net Capital to required margin for open interest) of futures firms is declining, raising alerts. According to the Financial Supervisory Commission (FSC), while none of the 14 dedicated futures firms have breached the 15% regulatory red line, a total of 10 are planning cash capital increases or subordinated debt issues to strengthen their capital. The Taiwan Futures Exchange (TAIFEX) has also formed a special task force to review whether the current calculation formula needs optimization.
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- 📰 Published: May 19, 2026 at 19:47
- 🔍 Collected: May 19, 2026 at 20:01 (14 min after Published)
- 🤖 AI Analyzed: May 19, 2026 at 20:22 (20 min after Collected)
With Taiwan's stock market booming, the declining ANC ratio (Adjusted Net Capital to total required margin for open positions) of futures firms is setting off alarms. The Financial Supervisory Commission (FSC) stated that while none of the 14 dedicated futures firms have currently breached the 15% red line for ANC ratio, a total of 10 firms are planning cash capital increases or to issue subordinated debt to strengthen their capital.
The Taiwan Futures Exchange (TAIFEX) has also formed a special task force to review international practices and assess whether the current formula needs optimization, but the FSC has not yet received TAIFEX's research report.
Huang Chung-hao, Deputy Director-General of the FSC's Securities and Futures Bureau, pointed out that current capital requirements for futures firms are based on their Adjusted Net Capital (ANC) ratio. The numerator is the firm's adjusted capital, and the denominator is the required margin for open positions. Due to the recent market boom, some firms' contract positions have grown, increasing the denominator and causing their ANC ratio to decline.
According to regulations, futures firms must report to the authorities if their ANC ratio falls below 20%; if it falls below 15%, they must stop accepting new orders and submit an improvement plan.
Huang explained that as of May 15, the ANC ratios of all 14 domestic dedicated futures firms were above 15%, so no firm has had to stop taking new orders. However, there is indeed a trend of declining ANC ratios. Statistics show only one firm is below 20%, eight are between 20% and 30%, and five are above 30%.
The FSC explained that it has instructed TAIFEX to closely monitor changes in futures firms' ANC ratios and guide them in making improvements, such as through capital increases to bolster operating funds, and by strengthening risk control in proprietary and brokerage businesses.
Huang noted that firms have been submitting plans for cash capital increases or subordinated debt issuance. Among the 14 firms, nine are planning cash increases and four are planning to issue debt. As some firms are pursuing both avenues, a total of 10 firms are planning to raise capital. If a firm's need for capital is urgent, TAIFEX also offers solutions, such as relaxing terms for letters of credit or overdraft facilities, to help them obtain short-term funds.
Regarding a general review of the rules, Huang stated that in March of this year, the FSC asked TAIFEX to compare international practices, including the calculation methods for the formula's numerator and denominator, regulatory oversight of the ratio, and whether other control mechanisms could be optimized. TAIFEX has already formed a special task force and invited the industry association and firms for discussions, but the FSC has not yet received its report.
Concerning public interest in the number of stocks placed under disposition measures in the first five months of the year, Huang explained that from the beginning of the year to May 18, 113 listed and 126 over-the-counter companies, totaling 239, were subject to such measures. In comparison, the figures for the same periods in 2024 and 2025 were 304 and 199 stocks, respectively, indicating that this year's number is not particularly high.
As for whether to revise the conditions for placing stocks under disposition, Huang said that the Taiwan Stock Exchange and the Taipei Exchange have been asked to study whether there is room for adjustment in the current mechanism. This includes a careful review of the criteria for 'attention stocks' and the duration of 'disposition stock' measures. 'Attention stocks' are the preceding stage to 'disposition stocks', with criteria including abnormal price fluctuations, trading volume, turnover rate, or concentration. Once a stock becomes a 'disposition stock,' the duration and methods of disposition can be further studied.
The Taiwan Futures Exchange (TAIFEX) has also formed a special task force to review international practices and assess whether the current formula needs optimization, but the FSC has not yet received TAIFEX's research report.
Huang Chung-hao, Deputy Director-General of the FSC's Securities and Futures Bureau, pointed out that current capital requirements for futures firms are based on their Adjusted Net Capital (ANC) ratio. The numerator is the firm's adjusted capital, and the denominator is the required margin for open positions. Due to the recent market boom, some firms' contract positions have grown, increasing the denominator and causing their ANC ratio to decline.
According to regulations, futures firms must report to the authorities if their ANC ratio falls below 20%; if it falls below 15%, they must stop accepting new orders and submit an improvement plan.
Huang explained that as of May 15, the ANC ratios of all 14 domestic dedicated futures firms were above 15%, so no firm has had to stop taking new orders. However, there is indeed a trend of declining ANC ratios. Statistics show only one firm is below 20%, eight are between 20% and 30%, and five are above 30%.
The FSC explained that it has instructed TAIFEX to closely monitor changes in futures firms' ANC ratios and guide them in making improvements, such as through capital increases to bolster operating funds, and by strengthening risk control in proprietary and brokerage businesses.
Huang noted that firms have been submitting plans for cash capital increases or subordinated debt issuance. Among the 14 firms, nine are planning cash increases and four are planning to issue debt. As some firms are pursuing both avenues, a total of 10 firms are planning to raise capital. If a firm's need for capital is urgent, TAIFEX also offers solutions, such as relaxing terms for letters of credit or overdraft facilities, to help them obtain short-term funds.
Regarding a general review of the rules, Huang stated that in March of this year, the FSC asked TAIFEX to compare international practices, including the calculation methods for the formula's numerator and denominator, regulatory oversight of the ratio, and whether other control mechanisms could be optimized. TAIFEX has already formed a special task force and invited the industry association and firms for discussions, but the FSC has not yet received its report.
Concerning public interest in the number of stocks placed under disposition measures in the first five months of the year, Huang explained that from the beginning of the year to May 18, 113 listed and 126 over-the-counter companies, totaling 239, were subject to such measures. In comparison, the figures for the same periods in 2024 and 2025 were 304 and 199 stocks, respectively, indicating that this year's number is not particularly high.
As for whether to revise the conditions for placing stocks under disposition, Huang said that the Taiwan Stock Exchange and the Taipei Exchange have been asked to study whether there is room for adjustment in the current mechanism. This includes a careful review of the criteria for 'attention stocks' and the duration of 'disposition stock' measures. 'Attention stocks' are the preceding stage to 'disposition stocks', with criteria including abnormal price fluctuations, trading volume, turnover rate, or concentration. Once a stock becomes a 'disposition stock,' the duration and methods of disposition can be further studied.