Friday, June 14, 2024

Hong Kong Brokers Seek SFC Clearance Before Virtual Asset Trading Law

Companies that offer financial services in Hong Kong are reportedly already undertaking the preliminary preparations necessary to offer their goods and services to individual retail investors, as reported by the regional media.

It has been asserted that brokers and fund managers in the region have made inquiries about the essential help on the licensing requirements in preparation for the new regulations.

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance in Hong Kong was revised during the month of December 2022 by local legislators (AMLO). The legislature has given its approval to this change, which is in line with the existing attitude of the region regarding the broadening of opportunities for trading cryptocurrencies.

Because the amendment creates a new licensing structure for virtual asset service providers, it will now be possible for individual investors to participate in the trading of virtual assets as a direct result of the amendment. At current time, the buying and selling of digital assets is restricted to only experienced investors and traders who can demonstrate that they have at least one million dollars worth of bankable assets in their possession.

Victory Securities and Interactive Brokers were the first two brokers in Hong Kong to receive approval from the SFC to trade digital assets for the professional customers of their respective firms.

Consumers who are interested in trading Hong Kong-listed exchange-traded fund futures that are based on Bitcoin do not require a specialist license at this time in order for Hong Kong-based brokers to be able to provide services to those customers. However, businesses who want to offer trading in virtual assets will need additional authorisation from the SFC in order to do so.

The first of March of this year was supposed to mark the beginning of the implementation of the new licensing criteria.However, in order to provide businesses who provide services for virtual assets additional time to adequately prepare, the deadline has been pushed back to the 1st of June.

This comes as a direct outcome of the recent selection of Julia Leung to fill the position of chief executive officer at the SFC.She has already stated that she is in favor of tightening the stringency of the laws governing cryptocurrencies in the local area.



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