Hong Kong SFC Expedites Spot Bitcoin ETF Applications for SEC-Approved Asset Managers
4 out of 11 issuers approved by the SEC for listing Bitcoin ETF applications on US stock exchanges hold Hong Kong Asset Management licenses.
Four Bitcoin ETF issuers including BlackRock and Fidelity approved earlier this week by the US Securities and Exchange Commission (SEC), possess Hong Kong Asset Management licenses. According to Hong Kong media outlet “Ming Pao,” among these issuers, BlackRock already fully functions as an ETF issuer.
After the approval of spot Bitcoin ETFs by the SEC, traditional financial institutions gain the ability to acquire Bitcoin through these instruments, contributing to heightened awareness and demand for Bitcoin in the market. Given the total supply of Bitcoin is limited, increased demand has the potential to drive up its price.
Despite Hong Kong permitted the issuance of spot ETFs ahead of the United States, the actual launch of products is anticipated to be slightly delayed compared to the US, as per market expectations for overall product issuance.
Thus, the Hong Kong Securities Regulatory Commission (SFC) indicated its readiness to accelerate the processing of inquiries for spot Bitcoin ETFs in Hong Kong if the products have already received approval from the US Securities and Exchange Commission (SEC) for listing.
The SFC along with the Hong Kong Monetary Authority, released a statement at the end of December 2023, expressing readiness to receive applications for virtual currency spot ETFs. As of now, there are only three virtual currency futures ETFs in Hong Kong.
The listing of Bitcoin spot ETFs in the United States is seen as a step to foster the growth of the virtual currency industry. It is expected that the SFC, following the latest developments in the sector, will also introduce new policy adjustments to the circular on spot ETFs introduced earlier.
Crucial Role of Hong Kong Exchanges
Exchanges play a pivotal role in the functioning of ETFs ensuring liquidity, transparency and efficiency in the trading of ETFs.
Recently, Hong Kong’s virtual asset trading platform HashKey Exchange disclosed that approximately 10 fund companies are gearing up to introduce virtual asset spot ETFs in Hong Kong, with around 7 to 8 already in the active development phase.
The new issuers might opt for licensed exchanges to handle underlying assets and offer trading, clearing and related services. HashKey among others has been selected by several issuers to provide the infrastructure and, in some cases, collaborate with the issuers in the application process.
The evolving landscape of spot Bitcoin ETFs, marked by regulatory approvals, global market dynamics, and institutional participation, underscores the intricate interplay between jurisdictions, facilitating the broader adoption of digital assets.
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