Hong Kong’s Securities and Futures Fee (SFC) is “actively wanting” to create a regulatory framework that enables crypto futures exchange-traded funds (ETFs), an SFC official reportedly mentioned. “Now we have come to imagine that some preliminary issues about digital asset futures ETFs have change into manageable and will be addressed with correct safeguards.”
Rising Demand for Crypto ETFs in Hong Kong
Hong Kong’s high monetary regulator is “actively wanting” to arrange a regulatory framework that enables retail buyers to commerce exchange-traded funds (ETFs) with publicity to cryptocurrency futures, Ignites Asia reported Monday. The publication cited Julia Leung, deputy chief govt officer and govt director for the Intermediaries Division on the Securities and Futures Fee (SFC).
Leung reportedly mentioned final week throughout her keynote speech at Hong Kong Fintech Week that the SFC is “actively seeking to arrange a regime to authorize ETFs that present mainstream digital property with acceptable investor guardrails.”
She defined that originally, the Securities and Futures Fee will solely enable ETFs that make investments in bitcoin futures and ether futures traded on the Chicago Mercantile Alternate (CME) alternate.
The SFC printed a round on Oct. 31 outlining the necessities beneath which it “would contemplate authorizing exchange-traded funds (ETFs) that acquire publicity to digital property (VAs) primarily by way of futures contracts (VA Futures ETFs) for public providing in Hong Kong,” the regulator detailed, elaborating:
A broad vary and bigger variety of funding merchandise offering publicity to VAs, together with VA-related ETFs provided in numerous markets globally, at the moment are obtainable to each retail {and professional} buyers and have change into more and more standard. Equally, demand for such merchandise has elevated in Hong Kong.
The round additional states that the SFC “is ready to just accept functions for authorization of VA Futures ETFs.”
A regulatory framework for crypto property was first issued in November 2018 proscribing entry to skilled buyers. Defending the choice to disallow retail buyers to commerce crypto, Leung mentioned: “Given the novelty of our framework and the excessive volatility of crypto property, we believed it was prudent to impose an overarching ‘skilled investor’ restriction.”
Nevertheless, the chief director emphasised that Hong Kong’s crypto ecosystem had made “substantial development” in the previous 4 years. Throughout this time, the SFC had gained extra expertise in regulating crypto buying and selling platforms and fund companies, she detailed, elaborating:
Now we have come to imagine that some preliminary issues about digital asset futures ETFs have change into manageable and will be addressed with correct safeguards.
“It’s now an opportune time to assessment the ‘skilled investor solely’ requirement,” she added, emphasizing that the SFC is getting ready to regulate its “regulatory response and permit retail entry” to safety token choices with sure safeguards in place.
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