Recently, I’ve been researching Taiwan’s Taiwan Innovation Board and Strategic New Board, and I find these two segments quite interesting and well worth paying attention to.

First, let’s talk about what Strategic New Board stocks are available right now. Originally, there were 21 companies listed on the Strategic New Board, but most of them later moved to the OTC general board, so in practice there are only 3 left now: Pin Yuan, General Stem Cells, and Yijun Environmental Science. By comparison, on the Innovation Board side there are 4 listed companies: NaiChuang Technology-KY, Hongde Energy, Yunbao Energy, and Yitian Cool Go.

To be honest, the original intent behind setting up these two boards was a good one. In 2021, the Taiwan government launched the Innovation Board and Strategic New Board to support innovative enterprises. The Innovation Board falls under the Taiwan Stock Exchange; companies are required to have key core technologies and innovation capabilities, and their market value must not be less than NT$1 billion. The Strategic New Board is in the OTC market and targets small- and medium-sized innovative companies, with relatively lower thresholds. What’s interesting is that after a Strategic New Board company develops to a certain stage, it can be transferred and listed on the Innovation Board on the Taiwan Stock Exchange—so it’s essentially an upgrade process.

However, there’s a major limitation for investing in these two boards: participation is only open to qualified investors. Either they must be legal persons or individuals with at least 2 years of securities trading experience, or they must have proof of financial assets of NT$5 million, or their average annual income over the most recent 2 years must have reached NT$1.5 million. In simple terms, ordinary retail investors basically can’t get in.

For investors who can enter, I looked into the trading rules. Stocks on the Innovation Board and Strategic New Board cannot be traded for same-day delivery, and they can’t be traded on margin; moreover, the daily price fluctuation limits are different. On the Strategic New Board, the listed first 5 days have no price fluctuation limit, and after that it is 20%. For the Innovation Board, the limit is 10%. The trading unit starts from 1,000 shares, and odd-lot trading can only be conducted after-hours.

From a risk perspective, investing in these two boards does involve relatively higher volatility. There are fewer market participants, liquidity is scarce, and stock volatility is clearly higher than on the main board. I checked which Strategic New Board stocks currently have the largest trading volumes, and it’s still rather limited at the moment. However, in the long run, innovative enterprises are the direction of future development, and the Taiwan government continues to provide support. The number of qualified investors has already exceeded 190,000, and more companies should join later on.

If you really want to invest, my suggestion is to prioritize stocks with relatively higher trading volumes, because liquidity is especially important for this segment. In addition, applying for new listings (IPO subscriptions) could be a strategy—after the initial price rise bonus period passes, consider exiting. But honestly, for most retail investors, direct investment is probably not very feasible. It may be better to consider other investment channels related to innovative companies, such as some global index funds, which offer more diversified risk and have lower entry barriers.