What Is the Taiwan OTC Exchange (TWO)?

The Taiwan OTC Exchange (TWO) is an alternative securities exchange in Taiwan with lower listing criteria than that the Taiwan Stock Exchange (TWSE). For companies making an initial public offering (IPO), listing on the TWO can be a step toward getting listed on the TWSE. Initial funding of the non-profit TWO was donated by the Taiwan Securities Association, the TWSE Corporation, and the Taiwan Depository & Clearing Corporation.

Understanding the Taiwan OTC Exchange (TWO)?

The Taipei Exchange (TPEx), formerly the Gre Tai Securities Market (GTSM), is the foundation dedicated to serving over-the-counter (OTC) bond trading in Taiwan. It was established in Nov. 1994. The exchange's headquarters are located in the Zhongzheng District of Taipei City. In Feb. 2015, the Gre Tai Securities Market changed its name to the Taipei Exchange.

The TPEx deployed a weighted average stock index a year after its inception. The index tracks the performance of all stocks that have been listed on the TWO for more than one month. The exchange trades stocks (including emerging stocks), bonds (including government bonds, convertible bonds and international bonds) and derivatives.

The TPEx aims to promote economic development by supporting government economic policies and Taiwan’s local enterprises. The TPEx develops products, boosts market turnover, and engages in exchanges and cooperative programs with other capital markets. The TPEx provides financial products and trading services to the international market.

History of the TPEx

Over-the-counter (OTC) trading of securities in Taiwan began in Feb. 1988 under the management of the Taipei Securities Dealers Association (the predecessor of today’s Taiwan Securities Association). In 1993, the Ministry of Finance (MOF) wanted a more robust capital market with better OTC trading functions and set up an OTC center as a non-profit institution to promote the development of the OTC market in Taiwan. The TPEx was formally established according to the Securities and Exchange Act on Nov. 1, 1994, and took over OTC trading.

The TPEx Today

The TPEx has fostered emerging and high-tech industries, creative industries, small and medium enterprises, and micro-enterprises by providing a channel for public listing and capital raising. The TPEx has become a multi-functional market that offers centralized trading and over-the-counter negotiated trading. 

The exchange is open for trading sessions from 9 a.m. to 3 p.m. and post-market sessions from 1:40 p.m. to 2:30 p.m. on all days of the week except Saturdays, Sundays, and holidays.

As of 2020, the number of companies listed on Taiwan's OTC market is 782.