According to the recent report by Bloomberg, the Securities and Futures Commission (SFC) in Hong Kong said on May 23 that licensed companies would soon be able to provide services to retail investors.
Non-Compliance with SFC Rules Will Have Consequences
The agency stated in its release that owners of virtual asset trading systems who are ready to follow the SFC’s proposed rules are invited to submit an application for a license. Those who don’t want to follow the impending rules should prepare for an “orderly closure” of their commercial activities in Hong Kong, it stated.
Rules to be Implemented in Hong Kong from June 1
The rules which will be effective from June 1, 2023, must be adhered to by virtual asset trading platforms and will cover things like asset custody safety requirements, client asset segregation, and cybersecurity requirements, among other things. As a result of this development, beginning on June 1, retail investors will be able to trade bigger tokens like BTC and ETH.
Hong Kong Eyes Innovation
According to Ms. Julia Leung, Chief Executive Officer of the SFC, establishing precise regulatory objectives is “key” to fostering a culture of responsible and innovative growth.
She states:
“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.”
The SFC also said that it will be putting in place “a number of robust measures.” In addition to high admission standards and disclosure, these include excellent governance, suitability throughout the initial onboarding process, and increased token due diligence.
No Authorization Yet
Notably, the SFC has not yet authorized any trading platform for virtual assets to offer services to individual investors.
Since the cryptocurrency market crashed last year, many nations, including Hong Kong, have taken action to regulate the sector. The SFC has outlined the guidelines for organizations that wish to introduce an exchange-traded fund (ETF) connected to digital assets through an Initial Public Offering (IPO). Hong Kong has recently taken efforts to embrace a stringent regulatory stance, demonstrating its commitment to upholding a secure and stable financial sector.
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