Hong Kong’s securities regulator has unveiled a regulatory framework for secondary trading of tokenised products, aimed at expanding the digital asset ecosystem in the city with “robust” safeguards for investors.
The move comes three years after tokenised assets were introduced in Hong Kong. Last year alone, tokenised assets grew around sevenfold to around HK$10.7 billion (US$1.36 billion), according to figures from the Securities and Futures Commission (SFC).
The SFC’s framework for secondary trading of tokenised products includes requirements related to trading channels, pricing and liquidity for authorised open-ended funds on virtual asset trading platforms.
“The framework will initially focus on tokenised money market funds, with plans to review operations and consider expanding the product scope in due course,” the SFC says in a statement on April 20, adding that this will broaden retail access to regulated trading services.
“The SFC may also consider over-the-counter secondary trading arrangements on a case-by-case basis,” the regulator says.
According to Julia Leung, chief executive officer of the SFC, the framework “marks another major milestone on Hong Kong’s journey to build out a fully integrated, innovative and scalable digital asset ecosystem with robust investor safeguards”.
