The Financial Supervisory Service has requested domestic asset management companies to wait until specific measures are established regarding the excessive inclusion of corporations related to virtual assets in active exchange-traded funds (ETFs). Under the current system, investment in virtual assets through corporations is prohibited, meaning they must wait until the outlines of the ongoing regulatory improvements are revealed.
According to financial authorities and the asset management industry on the 23rd, the Financial Supervisory Service recently sent such opinions to some asset management companies.
The FSS's recent opinion intends to ensure compliance with the administrative guidance prepared by the government since 2017. This guidance includes prohibitions on the holding and trading of virtual assets by corporations.
An FSS official noted, "In the case of passive ETFs tracking indices like the Nasdaq 100, there are no specific regulations applied if the included stocks are related to virtual assets. However, in the case of active ETFs, they suggested that avoiding disproportionately high allocations and making adjustments may be necessary until related guidelines are established."
Recently, with the surge of interest in virtual assets, domestic asset management companies are increasing the proportion of related stocks in some active ETFs. It seems this reflects the rise in stock prices of related companies, following the Trump administration's introduction of virtual asset-friendly policies in the U.S.
The regulations regarding corporate investment in virtual assets, which had been prohibited in Korea, are expected to be somewhat relaxed. This year, a policy is being pursued to gradually allow corporate investments in virtual assets in the country, starting with non-profit corporations, followed by general listed corporations excluding financial investment firms, and eventually all general corporations.
The Financial Services Commission had also included the introduction plan for virtual asset spot ETFs in last month's briefing for the Presidential Committee on Policy Planning. This appears to be a follow-up to President Lee Jae-myung's promise during his campaign to allow spot ETFs based on virtual assets like Bitcoin.
An FSS official mentioned, "There are various discussions on how to proceed with regulations concerning virtual assets. Currently, the prohibition of corporate investment in virtual assets remains a valid regulation, and they are asking to wait until a general direction is proposed in the future."
"Additionally, the current lack of information related to virtual assets in the investment prospectus implies a request to align operations with the content of the prospectus," he added.