The well-known Bitcoin spot ETF has finally been successfully listed in the United States, with a net inflow of US$10 billion in seven days of trading, and the asset size reached US$259 billion, showing the enthusiasm of traditional investors for Bitcoin spot ETF. However, it is now reported that many Taiwanese brokerages have stated that they can no longer buy through the re-entrustment method, cutting off the legitimate channel for investors to invest in Bitcoin in Taiwan.
What is re-delegation?
Sub-brokerage is formally known as "the business of buying and selling foreign securities under entrustment". It allows investors to open a "sub-brokerage account" with a domestic brokerage firm that is qualified to sub-broker foreign securities without having to fly overseas to open a securities account. The domestic brokerage firm will then place an order with a foreign brokerage firm after receiving the order. Because the order is processed twice by the domestic and foreign brokerage firms, it is called "sub-brokerage".
Because it is through Taiwan's familiar securities and banks, it is easy to retrieve funds in case of an accident. Therefore, re-entrustment has always been a common choice for Taiwanese investors to invest in overseas securities.
Taiwan not only cannot issue, but also prohibits the use of multiple entrustment model to buy and sell
According to the announcement of the brokerage firm, not only are Taiwan's investment trusts unable to issue Bitcoin ETFs due to regulatory restrictions, the competent authorities have also banned the purchase and sale of Bitcoin ETFs issued overseas through the re-entrustment model. As a result, investors can only invest in Bitcoin ETFs through overseas brokerage firms.
(Keeping up with the US Bitcoin ETF craze? Deputy Director of the Securities and Futures Bureau of the Financial Supervisory Commission: It is currently not possible to issue it in China)
The announcement of Cooperative Bank Securities explained:
The competent authority notified that, considering the large price fluctuations and high risks of virtual currency products, in order to protect investors, for the entrusted purchase and sale of foreign securities linked to virtual currency (such as Bitcoin) spot and futures related products, only entrustment to sell can be accepted for the time being, and no new entrustment to buy can be accepted.
Taiwan has been authorizing and promulgating the "Securities Firms' Entrusted Trading of Foreign Securities Management Rules" since 80, based on Article 44, Paragraph 4 of the Securities and Exchange Act, officially allowing securities firms to handle entrusted trading of foreign securities, allowing investors to deploy their assets globally through the trading of foreign securities. In 105, the scope of foreign securities trading allowed for non-professional investors to include non-leveraged or short-selling gold ETFs.
According to industry insiders, ETFs originally only regulated the linked targets for non-professional investors, but since Bitcoin ETFs became the focus of news, the Financial Supervisory Commission had to make a statement. Yesterday, the Securities Association was still investigating which Bitcoin ETFs are currently sold in Taiwan and the current balance.
What are the other options for buying and selling Bitcoin ETFs?
Without the channel of re-entrustment, Taiwanese investors can only buy and sell Bitcoin ETFs by opening accounts with overseas brokerages! Although you don’t need to fly overseas to open an account now, you can just apply online with your passport. However, the disadvantage is that you have to remit money overseas, and if something goes wrong, you need to communicate directly with the overseas brokerage. But the advantage is that the handling fee is much lower than re-entrustment, and some can also operate funds, futures or options.
Mr. Market has a complete introduction to overseas investment options. Interested friends may wish to research online before making a decision.