Hong Kong’s Securities and Futures Commission (SFC) has launched a public consultation on regulating virtual asset trading platforms in Hong Kong.
Hong Kong’s Securities and Futures Commission (SFC) is seeking public comments on regulating virtual asset trading platforms in Hong Kong.
Beginning on 1 June 2023, any virtual asset trading platform that conducts business or targets investors in Hong Kong must obtain an SFC license under the new licensing system.
The SFC’s proposed regulatory standards are based on current Securities and Futures Ordinance regulations and are similar to those for licensed securities brokers and automated trading venues.
The SFC has also proposed revisions to the current requirements, and during the consultation period, the commission has asked for feedback on whether licensed platform operators should serve retail traders and what additional measures are necessary to protect individual investors.
The SFC has suggested that virtual asset trading platforms include robust measures to protect investors, following the ‘same business, same risks, same rules’ principle.
Hong Kong is taking advantage of its independent status to allow brokers and platforms to apply for local licenses, allowing cryptocurrency trading.
Interactive Brokers, a US electronic trading platform, has already launched digital assets trading services in Hong Kong. Although only professional traders can trade cryptos with Interactive Brokers, a change in local regulations may allow retail customers access to these services.
Hong Kong is also considering allowing retail traders access to crypto exchange-traded funds (ETFs), which are already available in Europe but still waiting for regulatory approval in the US. Meanwhile, CSOP Asset Management, an investment advisor based in Hong Kong, launched the first crypto ETFs on the Hong Kong Stock Exchange.
