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September 2023
AAM Magazine
September 2023
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Hong Kong to launch virtual asset trading guidelines June 1

By Hui Ching-hoo   
May 29, 2023

Hong Kong’s securities regulator will allow virtual asset trading platforms to serve retail customers under brand new guidelines scheduled to be released later this week.

The move comes after the Securities and Futures Commission (SFC) sought feedback on its proposed guidelines over a month-long industry consultation earlier this year.

The SFC says it received 152 feedback from industry groups, professional and consulting firms, market participants, licensed corporations and other stakeholders, who generally welcomed the proposals.

“A significant majority of respondents agreed our proposal to allow the licensed trading platform operators to serve retail investors,” the regulator says in a statement on May 24, adding that it will implement “robust measures” to protect these investors. This includes ensuring their suitability in the onboarding process, good governance, enhanced token due diligence, admission criteria and disclosures.

The guidelines will be launched on June 1. Among other things, they cover safe custody of assets, segregation of client assets, avoidance of conflicts of interest, and cybersecurity standards and requirements for licensed trading platforms.

SFC Chief Executive Officer Julia Leung says providing clear regulatory expectations is key to fostering responsible development of virtual asset trading.

“Hong Kong’s comprehensive virtual assets regulatory framework follows the principles of same business, same risks, same rules and aims to provide robust investor protection and manage risks. This will enable the industry to develop sustainably and support innovation,” she says in the statement.