Stock exchange

Lore & Background

The beginnings of lending and securities trading trace to late medieval Italy. In the 14th century, Venetian lenders carried slates with information on issues for sale and met with clients, much like modern brokers. They exchanged debts between moneylenders and sold government debt to individual investors. The Venetians were leaders but did not trade privately with India or connect with the Chinese Silk Road. There is little consensus on when corporate stock was first traded; some point to the Dutch East India Company's founding in 1602, others to earlier developments in Bruges, Antwerp, and Lyon. The Amsterdam Stock Exchange is often considered the oldest modern securities market, and the first book on stock exchange, Confusion of Confusions, was written by Dutch-Jewish trader Joseph de la Vega in 1688. Economist Ulrike Malmendier argues a share market existed in ancient Rome, with societates publicanorum having partes or shares that were tradable with fluctuating values, as mentioned by Cicero.

Reader's Guide

Stock exchanges have served a critical economic function by providing liquidity and an efficient means for shareholders to dispose of shares. They evolved from informal gatherings, such as Venetian lenders meeting clients or brokers under a banyan tree in Mumbai, to formal institutions like the London Stock Exchange, which began with John Castaing posting price lists at Jonathan's Coffee House in 1698. The New York Stock Exchange opened under a buttonwood tree in 1792. The Bombay Stock Exchange was started by Premchand Roychand in 1875, becoming the first recognized by the Indian government in 1957. Stock exchanges also witnessed major financial bubbles, such as the South Sea Company and Mississippi Company manias around 1720, leading to regulatory responses like the Bubble Act. In recent years, electronic communication networks, alternative trading systems, and dark pools have taken much trading activity away from traditional exchanges, while digital platforms have increased market volatility. The exchange remains a central venue for primary market initial public offerings and secondary market trading, though off-exchange and over-the-counter trading also occur.

Did You Know?

• The first book on stock exchange, Confusion of Confusions, was written in 1688 by Joseph de la Vega, an Amsterdam trader from a Spanish Jewish family.
• The New York Stock Exchange opened on May 17, 1792, under a buttonwood tree in New York City, with 24 stockbrokers signing the Buttonwood Agreement.
• The Bombay Stock Exchange was started by Premchand Roychand in 1875, originally operating under banyan trees before moving to Dalal Street.
• Economist Ulrike Malmendier argues that a share market existed in ancient Rome, with societates publicanorum having tradable shares mentioned by Cicero.

Institutional Origins and Governance

The Taiwan Stock Exchange Corporation traces its institutional roots to 1961, when it was formally established as a financial institution serving the island's economy. Just over a year later, on 9 February 1962, it began operating as a stock exchange, marking the start of organized equity trading in Taiwan. Today the exchange is located in Taipei 101 in the capital city, a prominent address befitting an institution that has become central to the region's financial identity. Oversight of the TWSE falls under the Financial Supervisory Commission, which provides the regulatory framework within which all listed companies and market participants must operate. This governance structure has remained a constant thread from the exchange's early days through its evolution into one of the world's most significant equity markets. The fact that the exchange was created in 1961 means it has now guided Taiwan's capital markets for well over six decades, steadily expanding the number of companies and the depth of liquidity available to investors.

Global Scale and Market Dominance

By the close of 2013, the TWSE already hosted 809 listed companies whose combined market capitalization reached NT$24,519,622 million, a figure that underscored the exchange's substantial scale. That scale has since grown dramatically. As of January 2026, one of its listed names, Taiwan Semiconductor Manufacturing Company, stands among the ten largest public corporations on the planet by market capitalization, carrying a valuation of US$1.57 trillion at the end of 2025. This single company alone illustrates the extraordinary weight that the TWSE now carries in global corporate finance. The cumulative effect of such giants alongside hundreds of other listed firms propelled Taiwan to a landmark milestone in May 2026: the island's equity market became the fifth largest in the world measured by total market capitalization. This ranking places the TWSE firmly in the upper echelon of global exchanges, a remarkable trajectory for a market that first opened its trading floor in February 1962 with a far smaller roster of participating companies.

A Day on the Exchange Floor

The TWSE follows a structured daily rhythm that gives participants multiple windows to transact. The trading day opens before the official session, with pre-market information broadcast from 7:40 to 8:40, allowing investors and analysts to review developments and prepare their strategies. Normal trading then runs from 09:00 to 13:45, providing a continuous block of nearly five hours for buying and selling at prevailing market prices. After a brief pause, a fixed-price post-market session takes place from 14:00 to 15:00, offering a secondary window where trades execute at set prices rather than through continuous auction. This three-part structure—pre-market briefing, core session, and post-market window—gives the exchange a distinctive cadence. The schedule applies on all trading days, with the exchange remaining closed on Saturdays, Sundays, and any public holidays it declares in advance, ensuring that market participants have clear, predictable periods of inactivity built into the calendar.

Expanding the Market Ecosystem

The TWSE has not remained a single, static venue. In 1994, the exchange created the Gre Tai Securities Market, a dedicated platform designed for small growth companies. Recognizing the need for a more contemporary identity, this market was renamed the Taipei Exchange in 2015. The expansion continued in July 2021 with the creation of the Taiwan Innovation Board, or TIB, which added yet another market tier to the exchange's ecosystem. These layered markets mean that the TWSE now caters to a far wider spectrum of issuers than the original main board alone. Measuring the performance of the flagship listing, the Taiwan Capitalization Weighted Stock Index, commonly known as the TAIEX, serves as the most prominent and most frequently quoted gauge of how Taiwanese public companies are performing. Together, the multiple boards and the TAIEX create a comprehensive architecture that supports a broad range of companies from established names to newer entrants seeking access to public capital.

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