Hong Kong's Securities and Futures Commission (SFC) has announced that it will soon allow licensed platforms to serve retail investors.
In the CSRC's announcement on May 23, the regulator said it welcomes applications for licenses from operators of virtual asset trading platforms willing to comply with the CSRC's proposed guidelines. The guidelines for virtual asset trading platforms will include security requirements rements for asset custody, network security standards and client asset segregation, among others.
SFC chief executive Gigi Leung said providing clear regulatory expectations was "key" to creating an environment for responsible and innovative development. "Hong Kong's comprehensive virtual asset regulatory framework follows the principle of 'same business, same risk, same rules' and aims to provide strong protection for investors and manage key risks."
While the guidelines will come into effect in June 2023, the CSRC has yet to approve any virtual asset trading platform to offer services to retail investors. According to the announcement, the SFC received a total of 152 written opinions from the industry during the cons ultation period . In addition, the CSRC said it would implement "a number of robust measures" to ensure the protection of retail investors. These include good governance, suitability during the onboarding process, enhanced token due diligence, onboarding criteria and disclosures. The an announcement emphasized that Most of the virtual asset trading platforms currently available to the public are not regulated by the CSRC.
It went on to say that those who do not want to comply with the forthcoming guidelines should plan for an "orderly shutdown" of business operations in Hong Kong.
Neil Tan, chairman of the Hong Kong Fintech Association, said that the country's opening up of the financial industry to digital assets is “just a natural process.” On May 17, Chinese state-owned enterprise Greenland applied for a virtual asset trading license in Hong Kong.
