Hong Kong Regulator Gives Green Light to Wider Retail Virtual Asset Investments With Applicable Safeguards
Hong Kong’s financial regulators The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) have released new guidelines on how intermediaries are to conduct virtual asset-related activities in light of new market developments.
In a recent circular to guide market participants, the regulators highlighted the discrepancy in the distribution of digital asset-related products, provision of asset dealing services, guidance to asset management services, advisory services, etc.
The SFC and HKMA have reversed their position slightly to allow a wider range of clients to get access to virtual asset products rather than “professional investors only.”
“The policy is updated in light of the latest market developments and inquiries from the industry seeking to further expand retail access through intermediaries and to allow investors to directly deposit and withdraw virtual assets to/from intermediaries with appropriate safeguards.”
This new announcement comes following updates in the market and concerns by local regulators after the JPEX incident.
Hong Kong's Commissioner of Customs and Excise, Louise Ho Pui-shan, called for scrutiny in the market following the JPEX saga, and with institutional investors prepping for the rollout of spot ETFs, local investors needed a policy change.
In addition to the general complex product regime issue around virtual asset-related products, some restrictions still apply to intermediaries offering to retain investors.
Firstly, except for certain products like virtual asset futures contracts and other regulated markets, other VA-related products should only be offered to professional investors.
Also, intermediaries seeking to offer services to retail clients must assess
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