Vladislav Sopov
Hong Kong Securities and Futures Fee (SFC) up to date rules of operations with crypto and crypto ETFs
Contents
The Securities and Futures Fee (SFC) and the Hong Kong Financial Authority (HKMA) issued a really complicated round to make clear the foundations for firms providing providers in some way associated to digital belongings. A few of these belongings are thought of “advanced merchandise” which might be explicitly prohibited from being launched to retail shoppers.
Digital belongings are “advanced merchandise” just for skilled buyers, new HK round says
Digital assets-related merchandise which might be thought of advanced merchandise ought to solely be supplied to skilled buyers, as per the brand new document referred to as Joint Round On Intermediaries’ Digital Asset-Associated Actions issued by Hong Kong watchdogs yesterday, Oct. 20, 2023.
The discharge of the doc was noticed by the Chinese language crypto journalist Colin Wu.
Nevertheless, the precise definition of “complexity” stays too imprecise within the doc. As an example, its authors added that an abroad VA non-derivative ETF would “very possible” be thought of a fancy product that ought to solely be accessible to professionals.
On the similar time, some exchange-traded VA derivatives traded on regulated exchanges specified by the SFC nonetheless could be accepted for providing to retail buyers.
Even when accepted for work with retail non-qualified buyers, the providers ought to conduct “digital belongings information checks” and educate their shoppers in regards to the alternatives and dangers of cryptocurrency markets.
Additionally, the doc specified new guidelines for asset administration funds that work with cryptocurrency belongings and cryptocurrency advisors.
Hong Kong lawmakers sending combined indicators
As an example, each advisor ought to test the amount of liquidity for an asset they advocate and its listings observe on varied exchanges:
Intermediaries ought to, at a minimal, be sure that the digital asset is an eligible large-cap digital assete, it ought to have been included in a minimal of two acceptable indices issued by no less than two totally different index suppliers
This rule may have an effect on the section of crypto advertising and promoting, as no particular guidelines for selling cryptocurrencies have been launched.
In 2023, Hong Kong regulators issued quite a few varied crypto-related statements. As an example, in June 2023 they have been mentioned to “force” native banks to begin working with crypto-friendly companies.
Two weeks later, the pinnacle of the HK SFC warned that making Hong Kong a world buying and selling hub for crypto was by no means the purpose of his fee.