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Hong Kong’s SFC Chief Includes New Regulations for Investor Protection



The Hong Kong Securities and Futures Commission gets ready to initiate a new regulatory control for virtual assets trading platforms which will produce non-security tokens within its limit.

The chief of HK’s SFC, Julia Leung said to the local media on Thursday, March 30 that the crypto platforms are included in the Web 3.0 ecosystem.

As a result, regulations should be placed on them from the investor protection perspective.

The SFC (Securities and Futures Commission) set a consultation in motion on the suggested requirements for the operators of virtual assets trading platforms.

Details of the Proposed Requirements

Note 1: Under the latest licensing regime that will commence by June 1, 2023, every centralized virtual asset trading company transacting business in HK or currently selling to Hong Kong investors will require an SFC license.

Note 2: The SFC suggested regulatory requirements for virtual assets trading platforms should base on the regulatory requirements of the current regime under the SFC.

Note 3: Also, the requirements should be similar to those meant for licensed securities brokers as well as automated trading sites.

The Securities Futures Commission also utilized this opportunity to suggest modifications to certain requirements of the present regime.

Note 4: As a section of the consultation, SFC is searching for opinions on whether they should allow licensed platform dealers to provide service to retail investors and if such is the case, what measures they should implement to add to the suggested range of healthy investors protection regulations.

This will include making sure of the onboarding client’s suitability and token admission.

Note 5: the SFC chief, Ms. Julia Leung said, “Given the present volatility and collapse of certain leading cryptocurrency trading exchanges worldwide, there is a clear agreement among the world’s regulators globally to regulate the virtual assets space so that investors can be protected adequately and the major risks managed effectively.

READ ALSO: Denmark Bitcoin Investors Should Get Ready for New Tax Concerns, Supreme Court Rules

Effects of Hong Kong’s SFC Regulations

According to experts, since Hong Kong keeps on using a crypto-friendly regulatory process, after announcing its pro-crypto stance last October, the sector is likely to experience additional Web3 businesses opening more and more in the city.

The expert Youwei Yang, the Ney York-based BIT Mining, chief economist, and Adjunct professor that teaches blockchain courses at Xiamen University China explained to Forkast.

“I believe that more cryptocurrency platforms, hedge funds, and market makers will surely follow and come back to Hong Kong”.

In addition, the chief executive of Metalpha, the Hong Kong headquarters of the digital assets management platform, Adrian Wang said that the present SFC consultation report shows the platform’s intentions to “accept retail investors to join the digital assets space”.

“Overall, this policy is beneficial to the industry for protecting the rights of the retail investors said Wang”.


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