The Securities and Futures Commission issued its own warning about the Reddit rally, highlighting margin calls as a major risk.
The SFC cautioned investors about market volatility from «overseas-listed stocks as investment discussion forums in social media gain prominence and become increasingly influential», according to a statement.
The securities regulator said it was working with local and international counterparts to «ensure fairness and orderliness in our markets».
Market Impact
The SFC warned about possible impact to market participants such as the suspension of trading services, including for overseas execution brokers, with the ability to open or close out existing positions disabled.
Margin level requirements for brokers could also be quickly revised and investors could be asked to make immediate margin calls.
«The SFC will not hesitate to take regulatory action if there is evidence that intermediaries are not acting in the best interests of their clients and the integrity of the market,» the SFC added.
