The long-awaited Bitcoin spot ETF has finally been listed in the United States, with a seven-day net inflow of $1 billion and a total asset size of $25.9 billion, indicating the enthusiasm of traditional investors for Bitcoin spot ETFs. However, it is now reported that several Taiwanese securities firms have stated that they can no longer buy Bitcoin through sub-brokerage, cutting off the legitimate channel for Taiwanese investors to invest in Bitcoin.
What is sub-brokerage?
Taiwan not only cannot issue Bitcoin ETFs, but also prohibits the buying and selling of foreign Bitcoin ETFs through sub-brokerage.
What other options are there for buying and selling Bitcoin ETFs?
The formal name for sub-brokerage is “sub-brokerage of foreign securities trading business,” which allows investors to open a “sub-brokerage account” through domestic securities firms with overseas sub-brokerage qualifications instead of flying overseas to open a securities account. After receiving the order from the investor, the domestic securities firm places an order with the foreign securities firm. Because the order goes through two actions, one by the domestic securities firm and one by the foreign securities firm, it is called “sub-brokerage.”
Because it is done through familiar securities and banks in Taiwan, it is easy to retrieve funds in case of any accidents. Therefore, sub-brokerage has always been a common choice for Taiwanese investors to invest in foreign securities.
According to the announcement by securities firms, in addition to being restricted by regulations, Taiwanese mutual funds cannot issue Bitcoin ETFs, and the regulatory authorities have also prohibited the buying and selling of foreign Bitcoin ETFs through sub-brokerage. As a result, investors can only invest in Bitcoin ETFs through overseas securities firms.
Cooperative Bank Securities explained in its announcement:
The regulatory authorities have notified that, considering the high price volatility and high risks of virtual currency commodities, in order to protect investors, only the selling of foreign securities linked to virtual currency (such as Bitcoin) spot and futures-related commodities is temporarily allowed, and no new buying orders are allowed.
According to industry insiders, originally, ETFs only specified non-professional investors as the linked targets. However, since Bitcoin ETFs became a news focus, the Financial Supervisory Commission had to make a statement. The Securities Association of Taiwan was still investigating yesterday, looking into which Bitcoin ETFs are being sold in Taiwan and the current balance.
Without the sub-brokerage channel, Taiwanese investors can only buy and sell Bitcoin ETFs through opening accounts with overseas securities firms! Although opening an account now does not require flying overseas, you can apply directly online with a valid passport. However, the disadvantage is that you have to transfer money overseas, and if something goes wrong, you need to communicate directly with the overseas securities firm. But the advantage is that the fees are much lower than sub-brokerage, and some can also trade funds, futures, or options.
For more information about overseas investment options, MarketMaster has a complete introduction. Interested friends can research online before making a decision.
Bitcoin spot ETF
Sub-brokerage
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