Hong Kong’s financial regulators, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA), crypto- announced a groundbreaking move in the spot ETF space.
In a joint announcement today, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority, the city’s de facto central bank, said both organizations are reviewing their current policies towards intermediaries engaging in virtual assets-related activities.
The SFC has expressed readiness to receive applications for authorization of various funds, including Virtual Asset Spot exchange-traded funds (VA Spot ETFs) alongside existing crypto futures ETFs.
In another circular published on December 22, the Securities and Futures Commission outlines criteria for funds to “invest directly in the same spot Virtual Asset (VA) tokens offered to the Hong Kong public on SFC-licensed Virtual Asset Trading Platforms (VATPs).”
SFC is carried out by these ETFs. cryptocurrency He emphasized that unit transactions must take place through SFC licensed crypto platforms or authorized financial institutions. The regulator added that in-kind and cash subscriptions and redemptions are permitted for spot Virtual Asset (VA) ETFs authorized by the SFC.
Regarding custody, the SFC stated that the trustee or custodian of the fund should only delegate the crypto custody function to an SFC-licensed Virtual Asset Trading Platform (VATP) or those that meet the crypto custody standards set by the HKMA.
The regulator added that for spot virtual asset valuation, the fund’s management companies “must adopt an indexing approach based on VA trading volume on major VA trading platforms.” The circular stated that funds planning to have crypto exposure exceeding 10% of their net asset value should consult with the SFC in advance.
Hong Kong has been open to crypto firms this year and actively encourages cooperation with banks.
Koinfinans.com As we reported, in October 2022, Hong Kong issued policy statements on cryptocurrencies to enhance its status as a global financial centre. In June, the city launched a crypto licensing system for virtual asset trading platforms, enabling licensed exchanges to offer retail trading services.