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Taiwan Exonerates Foreign Brokers over TSMC Reports

Lawmakers had questioned whether the foreign brokerages were making buy recommendations but actually selling TSMC shares

The logo of Taiwan's Financial Supervisory Commission
The logo of Financial Supervisory Commission is seen in its office in Taipei, Taiwan. Photo: Reuters


An inquiry by Taiwan into the actions of foreign brokers in regard to share trading involving chipmaker TSMC has determined that no irregularities occurred.

The country’s financial regulator cleared foreign brokers of inappropriate behaviour after lawmakers questioned whether analysts were recommending that clients buy TSMC shares – but selling the top chipmaker’s stock.

A Financial Supervisory Commission official said they sent questionnaires to brokerages about their analyst reports on Taiwan Semiconductor Manufacturing Co Ltd (TSMC), a major Apple supplier and the world’s largest contract chipmaker.

The regulator, in a written response to lawmakers, a copy of which was reviewed by Reuters on Monday, said that 10 brokerages, which it did not identify, had produced 45 research reports on TSMC between December and mid-March.

It said the brokerages’ analyst reports did not break any regulations, and that investment decisions were made by professional investors who adjust their asset allocation in response to international market fluctuations and global layout considerations.

Brokerage clients make their own decisions, and do not necessarily operate in the direction suggested by research reports, it added, citing the responses to the questionnaire.

TSMC’s Taipei-listed shares have fallen about 11% this year, while the broad market is down about 9%.

TSMC this month forecast an up to 37% jump in current-quarter sales and said it expected chip capacity to remain very tight this year, amid a global crunch that has kept order books full and allowed chipmakers to charge premium prices.


  • Reuters with additional editing by Sean OMeara




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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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