Special Administrative Region of the People’s Republic of China, Hong Kong’s Securities and Futures Commission (SFC) has announced its plans to permit licensed platforms to cater to retail investors.
In a statement released on May 23, the SFC welcomed virtual asset trading platforms that are willing to adhere to the proposed guidelines to apply for a license.
The guidelines for these platforms will encompass various aspects, including the safety of asset custody, segregation of client assets, and cybersecurity standards, among others.
Julia Leung, CEO of the SFC, emphasized the importance of providing clear regulatory expectations to foster a responsible and innovative development environment.
“Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks,” Leung stated.
Although the guidelines are set to take effect in June 2023, no virtual asset trading platform has yet been approved by the SFC to offer services to retail investors. During the consultation period, the SFC received 152 written submissions from industry stakeholders.
The SFC further revealed its commitment to implementing several measures to safeguard retail investors, including ensuring good governance, suitability assessments during the onboarding process, enhanced token due diligence, and establishing admission criteria and disclosure requirements.
The announcement highlighted that most virtual asset trading platforms accessible to the public are currently unregulated by the SFC. It added that those unwilling to comply with the forthcoming guidelines should prepare for an orderly closure of their business operations in Hong Kong.
Neil Tan, Chair of the FinTech Association of Hong Kong, expressed his view in an early May interview, stating that opening the financial industry to digital assets is a natural progression for the country.
Furthermore, on May 17, the state-owned Chinese company Greenland applied for a virtual asset trading license in Hong Kong, signaling a growing interest in the market.
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