Markets News Report Technology
December 25, 2023

Hong Kong SFC Limits Authorized Virtual Asset Funds to Invest in Tokens on Licensed VATPs

In Brief

SFC-authorized virtual asset funds are restricted to making direct or indirect investments in virtual asset tokens exclusively through licensed virtual asset trading platforms.

Hong Kong SFC Limits Authorized Virtual Asset Funds to Invest in Tokens on Licensed VATPs

The Hong Kong Securities and Futures Commission (SFC) issued the updated “Joint Circular on Virtual Asset-related Activities of Intermediaries,” stating that virtual asset funds authorized by the SFC are limited to investing directly or indirectly in virtual asset tokens (VA tokens) on licensed virtual asset trading platforms (VATP). 

Fund companies are required to maintain a solid compliance record and have at least one qualified staff member with relevant experience in virtual asset or related product management.

Spot virtual asset exchange-traded funds (VA spot ETFs), approved by the SFC, allow subscription and redemption in both physical and cash forms. For ETFs investing in spot virtual assets, major shareholders must be SFC-licensed corporations or registered institutions complying with additional terms and conditions set by the licensing authority.

Hong Kong Welcomes ETFs Applications 

Last week, the SFC and Hong Kong Monetary Authority (HKMA) jointly announced their intention to begin accepting applications for the authorization of cryptocurrency ETFs and VA spot ETFs. The SFC also detailed the requirements for funds to directly invest in the same spot VA tokens accessible to the Hong Kong public for trading on SFC-licensed VATPs.

Hong Kong maintains its position as a leading hub for digital assets in the Asia-Pacific region, with regulators adopting a progressive stance toward cryptocurrencies.

The city has listed various futures-based cryptocurrency ETFs, including Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF.

The updated guidelines issued by SFC highlight Hong Kong’s progressive regulatory stance on virtual assets. As the SFC and HKMA open doors for cryptocurrency ETFs and VA spot ETFs, Hong Kong further solidifies its role in fostering innovation within the global digital asset landscape.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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