The Financial Supervisory Service (FSS), South Korea’s integrated financial regulator, has recommended asset management firms “not to excessively include” crypto stocks like Coinbase and Strategy in their ETFs portfolios. The regulator has issued verbal guidance to domestic firms, restricting the proportion of crypto companies in ETFs, Herald reported . The directive indicates that the 2017 administrative guidance related to virtual currencies is still valid and must be followed. Additionally, the FSS administrative guidance comprises provisions restricting financial institutions from “holding, purchasing, acquiring collateral, and investing in virtual assets.” “Recently, there has been a trend of deregulation related to virtual assets in the U.S. and Korea, but there have been no specific laws or guidelines established yet,” an FSS official noted. “This means that existing guidelines should be followed until the new system is complete.” South Korea’s Existing Digital Asset Guidelines Since 2017, Korean regulators have prohibited corporate transactions in virtual assets . The government’s decision at that time was driven by concerns over money laundering, given that corporate trading was seen as posing higher risks compared to individual trading. On December 13, 2017, the Korean government announced emergency measures in response to the increasingly speculative domestic cryptocurrency market. Domestic-Listed ETFs Hold Over 10% of ‘Coin Theme’ Stock: FSS The FSS guidance is interpreted as considering the recent rapid increase in ‘coin theme’ stocks, including coin exchanges and mining companies, being included in ETF markets. Among domestic listed ETFs, there are many products with a virtual asset-related stock proportion exceeding 10%, the report noted. For instance, the Korea Investment Trust Management’s ‘ACE US Stock Bestseller ETF’ holds Coinbase with a proportion of 14.59%. Similarly, ‘KoACT US Nasdaq Growth Company Active ETF’ also holds 7.44% of Coinbase, 6.04% of MicroStrategy, adding a total of 13.48% with the relevant stocks. According to industry insiders, these are passive ETFs that are structured to directly track an index. Besides, it is difficult to exclude passive ETFs. “If stocks are arbitrarily excluded without changing the index, the gap rate could skyrocket,” one industry insider noted. “I understand the regulatory tone, but it is not easy to respond immediately.” The local market has also argued that it isn’t fair to apply regulatory standards only to domestic ETFs, as they are already making indirect investments through ETFs of US-listed crypto investment companies. “Restricting only domestic ETFs will not stop the flow of funds, and in reality, many investors are already bypassing the market with U.S. ETFs,” another source noted. “It is questionable whether the regulations will be effective in reality.”The Financial Supervisory Service (FSS), South Korea’s integrated financial regulator, has recommended asset management firms “not to excessively include” crypto stocks like Coinbase and Strategy in their ETFs portfolios. The regulator has issued verbal guidance to domestic firms, restricting the proportion of crypto companies in ETFs, Herald reported . The directive indicates that the 2017 administrative guidance related to virtual currencies is still valid and must be followed. Additionally, the FSS administrative guidance comprises provisions restricting financial institutions from “holding, purchasing, acquiring collateral, and investing in virtual assets.” “Recently, there has been a trend of deregulation related to virtual assets in the U.S. and Korea, but there have been no specific laws or guidelines established yet,” an FSS official noted. “This means that existing guidelines should be followed until the new system is complete.” South Korea’s Existing Digital Asset Guidelines Since 2017, Korean regulators have prohibited corporate transactions in virtual assets . The government’s decision at that time was driven by concerns over money laundering, given that corporate trading was seen as posing higher risks compared to individual trading. On December 13, 2017, the Korean government announced emergency measures in response to the increasingly speculative domestic cryptocurrency market. Domestic-Listed ETFs Hold Over 10% of ‘Coin Theme’ Stock: FSS The FSS guidance is interpreted as considering the recent rapid increase in ‘coin theme’ stocks, including coin exchanges and mining companies, being included in ETF markets. Among domestic listed ETFs, there are many products with a virtual asset-related stock proportion exceeding 10%, the report noted. For instance, the Korea Investment Trust Management’s ‘ACE US Stock Bestseller ETF’ holds Coinbase with a proportion of 14.59%. Similarly, ‘KoACT US Nasdaq Growth Company Active ETF’ also holds 7.44% of Coinbase, 6.04% of MicroStrategy, adding a total of 13.48% with the relevant stocks. According to industry insiders, these are passive ETFs that are structured to directly track an index. Besides, it is difficult to exclude passive ETFs. “If stocks are arbitrarily excluded without changing the index, the gap rate could skyrocket,” one industry insider noted. “I understand the regulatory tone, but it is not easy to respond immediately.” The local market has also argued that it isn’t fair to apply regulatory standards only to domestic ETFs, as they are already making indirect investments through ETFs of US-listed crypto investment companies. “Restricting only domestic ETFs will not stop the flow of funds, and in reality, many investors are already bypassing the market with U.S. ETFs,” another source noted. “It is questionable whether the regulations will be effective in reality.”
South Korea Restricts Firms From Including Coinbase, Strategy in ETF Portfolios
3 min read
The Financial Supervisory Service (FSS), South Korea’s integrated financial regulator, has recommended asset management firms “not to excessively include” crypto stocks like Coinbase and Strategy in their ETFs portfolios.
The regulator has issued verbal guidance to domestic firms, restricting the proportion of crypto companies in ETFs, Herald reported.
The directive indicates that the 2017 administrative guidance related to virtual currencies is still valid and must be followed.
Additionally, the FSS administrative guidance comprises provisions restricting financial institutions from “holding, purchasing, acquiring collateral, and investing in virtual assets.”
“Recently, there has been a trend of deregulation related to virtual assets in the U.S. and Korea, but there have been no specific laws or guidelines established yet,” an FSS official noted. “This means that existing guidelines should be followed until the new system is complete.”
South Korea’s Existing Digital Asset Guidelines
Since 2017, Korean regulators have prohibited corporate transactions in virtual assets. The government’s decision at that time was driven by concerns over money laundering, given that corporate trading was seen as posing higher risks compared to individual trading.
On December 13, 2017, the Korean government announced emergency measures in response to the increasingly speculative domestic cryptocurrency market.
Domestic-Listed ETFs Hold Over 10% of ‘Coin Theme’ Stock: FSS
The FSS guidance is interpreted as considering the recent rapid increase in ‘coin theme’ stocks, including coin exchanges and mining companies, being included in ETF markets.
Among domestic listed ETFs, there are many products with a virtual asset-related stock proportion exceeding 10%, the report noted. For instance, the Korea Investment Trust Management’s ‘ACE US Stock Bestseller ETF’ holds Coinbase with a proportion of 14.59%.
Similarly, ‘KoACT US Nasdaq Growth Company Active ETF’ also holds 7.44% of Coinbase, 6.04% of MicroStrategy, adding a total of 13.48% with the relevant stocks.
According to industry insiders, these are passive ETFs that are structured to directly track an index. Besides, it is difficult to exclude passive ETFs.
“If stocks are arbitrarily excluded without changing the index, the gap rate could skyrocket,” one industry insider noted. “I understand the regulatory tone, but it is not easy to respond immediately.”
The local market has also argued that it isn’t fair to apply regulatory standards only to domestic ETFs, as they are already making indirect investments through ETFs of US-listed crypto investment companies.
“Restricting only domestic ETFs will not stop the flow of funds, and in reality, many investors are already bypassing the market with U.S. ETFs,” another source noted. “It is questionable whether the regulations will be effective in reality.”
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Crucial US Stock Market Update: What Wednesday’s Mixed Close Reveals
BitcoinWorld Crucial US Stock Market Update: What Wednesday’s Mixed Close Reveals The financial world often keeps us on our toes, and Wednesday was no exception. Investors watched closely as the US stock market concluded the day with a mixed performance across its major indexes. This snapshot offers a crucial glimpse into current investor sentiment and economic undercurrents, prompting many to ask: what exactly happened? Understanding the Latest US Stock Market Movements On Wednesday, the closing bell brought a varied picture for the US stock market. While some indexes celebrated gains, others registered slight declines, creating a truly mixed bag for investors. The Dow Jones Industrial Average showed resilience, climbing by a notable 0.57%. This positive movement suggests strength in some of the larger, more established companies. Conversely, the S&P 500, a broader benchmark often seen as a barometer for the overall market, experienced a modest dip of 0.1%. The technology-heavy Nasdaq Composite also saw a slight retreat, sliding by 0.33%. This particular index often reflects investor sentiment towards growth stocks and the tech sector. These divergent outcomes highlight the complex dynamics currently at play within the American economy. It’s not simply a matter of “up” or “down” for the entire US stock market; rather, it’s a nuanced landscape where different sectors and company types are responding to unique pressures and opportunities. Why Did the US Stock Market See Mixed Results? When the US stock market delivers a mixed performance, it often points to a tug-of-war between various economic factors. Several elements could have contributed to Wednesday’s varied closings. For instance, positive corporate earnings reports from certain industries might have bolstered the Dow. At the same time, concerns over inflation, interest rate policies by the Federal Reserve, or even global economic uncertainties could have pressured growth stocks, affecting the S&P 500 and Nasdaq. Key considerations often include: Economic Data: Recent reports on employment, manufacturing, or consumer spending can sway market sentiment. Corporate Announcements: Strong or weak earnings forecasts from influential companies can significantly impact their respective sectors. Interest Rate Expectations: The prospect of higher or lower interest rates directly influences borrowing costs for businesses and consumer spending, affecting future profitability. Geopolitical Events: Global tensions or trade policies can introduce uncertainty, causing investors to become more cautious. Understanding these underlying drivers is crucial for anyone trying to make sense of daily market fluctuations in the US stock market. Navigating Volatility in the US Stock Market A mixed close, while not a dramatic downturn, serves as a reminder that market volatility is a constant companion for investors. For those involved in the US stock market, particularly individuals managing their portfolios, these days underscore the importance of a well-thought-out strategy. It’s important not to react impulsively to daily movements. Instead, consider these actionable insights: Diversification: Spreading investments across different sectors and asset classes can help mitigate risk when one area underperforms. Long-Term Perspective: Focusing on long-term financial goals rather than short-term gains can help weather daily market swings. Stay Informed: Keeping abreast of economic news and company fundamentals provides context for market behavior. Consult Experts: Financial advisors can offer personalized guidance based on individual risk tolerance and objectives. Even small movements in major indexes can signal shifts that require attention, guiding future investment decisions within the dynamic US stock market. What’s Next for the US Stock Market? Looking ahead, investors will be keenly watching for further economic indicators and corporate announcements to gauge the direction of the US stock market. Upcoming inflation data, statements from the Federal Reserve, and quarterly earnings reports will likely provide more clarity. The interplay of these factors will continue to shape investor confidence and, consequently, the performance of the Dow, S&P 500, and Nasdaq. Remaining informed and adaptive will be key to understanding the market’s trajectory. Conclusion: Wednesday’s mixed close in the US stock market highlights the intricate balance of forces influencing financial markets. While the Dow showed strength, the S&P 500 and Nasdaq experienced slight declines, reflecting a nuanced economic landscape. 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A3: Mixed performances in the US stock market can be influenced by various factors, including specific corporate earnings, economic data releases, shifts in interest rate expectations, and broader geopolitical events that affect different market segments uniquely. Q4: How should investors react to mixed market signals? A4: Investors are generally advised to maintain a long-term perspective, diversify their portfolios, stay informed about economic news, and avoid impulsive decisions. Consulting a financial advisor can also provide personalized guidance for navigating the US stock market. Q5: What indicators should investors watch for future US stock market trends? A5: Key indicators to watch include upcoming inflation reports, statements from the Federal Reserve regarding monetary policy, and quarterly corporate earnings reports. These will offer insights into the future direction of the US stock market. Did you find this analysis of the US stock market helpful? Share this article with your network on social media to help others understand the nuances of current financial trends! To learn more about the latest stock market trends, explore our article on key developments shaping the US stock market‘s future performance. This post Crucial US Stock Market Update: What Wednesday’s Mixed Close Reveals first appeared on BitcoinWorld.
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