Regulators in Asia Sound Alarm on Social Media-Driven Volatility
February 03 2021 - 7:53AM
Dow Jones News
By Quentin Webb
Officials in two of Asia's biggest financial centers are
watching U.S. markets warily, concerned that local investors could
get hurt by piling into American meme stocks, or that the behavior
could spread to their home turf.
On Wednesday, Hong Kong's Securities and Futures Commission
warned investors about "the risks of trading highly volatile
securities, including overseas-listed stocks as investment
discussion forums in social media gain prominence and become
increasingly influential."
"Investors should carefully manage market risks arising in any
very volatile market," the regulator said, noting potential
pitfalls
(https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=21PR11)
around trading suspensions and margin requirements.
A day earlier, Singaporean authorities had advised investors to
"be on heightened alert" about the risks posed by trading driven by
online forums and chat groups, and to beware the potential for
pump-and-dump schemes.
Singapore's monetary authority and its stock exchange noted
local interest "in recent activities in U.S. markets relating to
stocks such as GameStop, AMC Entertainment Holdings, and
BlackBerry," and said online discussions suggested similar
speculation could happen in Singapore. The duo cautioned
(https://www.mas.gov.sg/news/media-releases/2021/beware-of-risks-related-to-trading-incited-by-online-discussions)
they were looking out for "false trading" and other misconduct.
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(END) Dow Jones Newswires
February 03, 2021 07:38 ET (12:38 GMT)
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