Are CFDs Legal in Taiwan?

A Contract for Difference (CFD) is a financial derivative instrument that allows traders to take advantage of price changes in an asset for profit or hedging. The full English name of CFD is Contract for Difference. It refers to a contract between a buyer and a seller, according to which the seller pays the buyer the difference between the current value of the asset and the position value, and vice versa.

CFDs are available in many countries and regions around the world, including the United Kingdom, the Netherlands, Poland, Portugal, Germany, Switzerland, Italy, Singapore, South Africa, Australia, Canada, New Zealand, Switzerland, Norway, France, Ireland, Japan and Spain, etc. . However, in the United States, Hong Kong and other regions, CFDs are prohibited or not allowed due to legal or regulatory restrictions.

So, what about in Taiwan? Are CFDs legal in Taiwan? According to the regulations of Taiwan's Financial Supervisory Commission (FSC), CFDs are "non-publicly issued securities". This means that the issuance or sale of CFDs in Taiwan requires approval or permission from the FSC. Currently, the main providers of CFD trading services in Taiwan are futures merchants.

According to Yuanta Futures Company, the currently open link targets in the Taiwan market are foreign exchange, gold and oil. Traders can open an account through a futures merchant and use margin mode to trade CFDs. However, when choosing a futures dealer, you need to pay attention to the following points:

• Legal supervision: Choose a futures merchant approved or licensed by FSC to protect your own rights and interests.

• Fund security: Choose a futures merchant with scale and reputation to ensure the safety of funds and smooth deposits and withdrawals.

• Liquidity risk: Choose a futures merchant that provides reasonable and transparent spread quotes to avoid excessive transaction costs or insufficient market depth.

In short, CFDs are legal in Taiwan, but they need to be traded through futures merchants and are regulated and restricted by the FSC. When trading CFDs, traders need to understand their operating principles and risks, and choose a legal, safe and reliable futures merchant. At the same time, traders also need to take measures to manage their risks, such as setting stop losses, controlling leverage, diversifying investments, etc.