Taiwan's Financial Supervisory Commission (FSC) Chairman Peng Jin-long told lawmakers that the regulator will launch an evaluation of switching from the existing 1,000-share lot system to a single-share unit, and promised to deliver a formal report within one month. If enacted, the reform would end a decades-old tradition and align Taiwan's stock market with international norms.
For example, Taiwan Semiconductor Manufacturing Co. (TSMC) currently trades at around NT$1,850 per share, making a single lot cost roughly NT$1.85 million – a steep barrier for retail investors. Lawmakers have pressed for scrapping the lot system in favor of a single-share framework.
Drawbacks of Odd-Lot Trading
Currently, Taiwan offers an intraday odd-lot mechanism, but it operates under a dual-track system with different pricing, matching speed, and order logic compared to regular lot trading. Investors face disadvantages such as minimum commission fees, inability to day-trade odd lots, and cumbersome procedures for claiming shareholder gifts.
Peng emphasized that the core of market regulation is "treating every trader fairly," and instructed the Taiwan Stock Exchange (TWSE) to study whether to unify the trading unit to one share.
International Comparison
U.S. markets have long used a single-share as the basic unit, and most brokers support fractional share trading, offering the highest flexibility globally. Taiwan's system has remained unchanged since the exchange's inception, making this potential reform a significant step toward global convergence.
Three Major Technical Hurdles
According to a report by the Economic Daily News, the TWSE faces three key challenges:
First, the entire order-matching system is built around 1,000-share lots; switching to single-share units would exponentially increase quote traffic and order volume, requiring a complete system overhaul.
Second, current monitoring mechanisms for alert and disposition stocks rely on "lots" as a benchmark. Anti-fraud systems would need to be redesigned.
Third, investors are accustomed to the "one lot = 1,000 shares" concept. Re-educating the market would take time. GreTai Securities Market Chairman Chien Li-chung also warned that low-priced stocks could become overly fragmented, adding operational burdens.
Related developments show Franklin Templeton partnering with Ondo Finance to launch a tokenized ETF supporting 24/7 trading via crypto wallets, and BMO teaming up with CME and Google Cloud to create a tokenized cash platform for instant settlement. These moves reflect a broader trend where traditional finance infrastructure is digitizing and tokenizing, echoing the push for unit reform in Taiwan.