Amid the anticipation around spot Bitcoin ETF approval in the U.S., Hong Kong’s financial regulators have said that the country is prepared to start accepting crypto ETF applications.
The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) jointly shared a circular saying that they have received a number of inquiries from intermediaries on virtual asset investment products.
Both of these agencies have reportedly reviewed existing policies for intermediaries and are “prepared to accept applications for crypto ETFs.
Additionally, the SFC has released a separate document citing requirements for issuing crypto-backed ETFs, which would be available for trading on SFC-licensed trading platforms.
The agency also said that crypto transactions for such ETFs will need to be processed only through licensed crypto platforms and authorized institutions.
Furthermore, the issuer and custody provider must operate with SFC-licensed trading platforms or entities that meet requirements set by the HKMA for storing underlying asset funds.
For the valuation of the asset’s spot market price, “the management companies of SFC-authorized VA Funds should adopt an indexing approach based on VA trade volume across major VA trading platforms,” said the regulator, adding, “the management companies should confirm that all necessary service providers are competent, available and ready to support the SFC-authorized VA Funds.”
The SFC also noted that funds intending to have an asset exposure of more than 10% of their net asset valuation will require prior consultation with the agency.
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