Hong Kong’s securities watchdog, the Securities and Futures Commission (SFC), has announced its plans to grant retail investors access to virtual assets platforms. The SFC intends to allow licensed platforms to cater to retail investors, according to a recent announcement made on May 23. Virtual asset trading platform operators who are willing to adhere to the SFC’s proposed guidelines are invited to apply for a license.
The forthcoming guidelines for virtual asset trading platforms will encompass various requirements, including the safety of asset custody, cybersecurity standards, and the segregation of client assets. Julia Leung, the CEO of the SFC, emphasized the significance of establishing clear regulatory expectations to foster a responsible and innovative development environment. The comprehensive regulatory framework in Hong Kong for virtual assets is designed to ensure uniform rules, equal risks, and robust investor protection.
Although the guidelines will come into effect in June 2023, the SFC has not yet approved any virtual asset trading platform to offer services to retail investors. During the consultation period, the SFC received 152 written submissions from industry stakeholders. Additionally, the SFC has outlined a series of stringent measures to safeguard retail investors, including ensuring good governance, suitability assessments during the onboarding process, thorough token due diligence, admission criteria, and disclosure.
The announcement further underscored that most of the virtual asset trading platforms currently accessible to the public in Hong Kong remain unregulated by the SFC. It also stated that platforms unwilling to comply with the forthcoming guidelines should make arrangements for an orderly closure of their operations in Hong Kong.
In a recent interview with Cointelegraph, Neil Tan, the chair of the FinTech Association of Hong Kong, described the opening of the financial industry to digital assets in the country as a natural progression. The development comes as the state-owned Chinese company Greenland has applied for a virtual asset trading license in Hong Kong, signaling continued interest in the sector.