Hong Kong – FinTech and Blockchain Law Watch

SFC Circular on SFC-Authorized Funds with Exposure to Virtual Assets–Part 1

Feb 15 2024

Earlier this year, the US Securities and Exchange Commission approved 11 spot Bitcoin ETFs. In Hong Kong, in view of rapid developments of virtual asset (VA) products and growing investment products offering exposure to VAs, the Securities and Futures Commission (SFC) issued a circular, on 22 December 2023, detailing requirements for investment funds with exposure of more than 10% of net asset value (NAV) to VA seeking authorization for public offerings in Hong Kong (Circular).

SFC Circular on Intermediaries Engaging in Tokenized Securities Activities (Part 2)

Jan 12 2024

By: Jay Lee and Beatrice Wun

In our previous blog, we discussed the Hong Kong Securities and Futures Commission (SFC)’s position on the taxonomy of tokenized securities and digital securities, and whether tokenized securities will be regarded as “complex products”. In this blog, we explore the guidance set forth in the SFC’s circular on intermediaries engaging in tokenized securities-related activities (the Circular).

SFC Circular on Intermediaries Engaging in Tokenized Securities Activities (Part 1)

Dec 29 2023

By: Jay Lee and Beatrice Wun

On 2 November 2023, Hong Kong’s Securities and Futures Commission (SFC) issued a circular addressing the participation of intermediaries in tokenized securities-related activities (the Circular). The move was timely, as we are seeing a growing interest among financial institutions in tokenizing traditional financial instruments in global financial markets.

The Circular supersedes the SFC’s 2019 Statement on Security Token Offerings (2019 Statement) and clarifies the meaning of tokenized and digital securities.

Hong Kong Stock Exchange Launches a New Blockchain-Based, Real-Time Settlement Platform

Oct 26 2023

By Jay Lee and Beatrice Wun

Hong Kong Stock Exchange (HKEx) recently launched “HKEx Synapse” (Synapse), a new blockchain-based settlement platform to complement the existing post-trade infrastructure for Northbound Stock Connect. “Stock Connect” in Hong Kong refers to a market access program through which investors in Mainland China and Hong Kong can trade and settle shares listed on the other market via exchanges and clearing houses in the home market. “Northbound Stock Connect” refers to the market access program where investors in Hong Kong can have access to shares in Mainland China.

Hong Kong Monetary Authority Unveils Fintech Promotion Roadmap

Sep 27 2023

By Jay Lee and Beatrice Wun

In a transformative step for the financial technology (fintech) industry, the Hong Kong Monetary Authority (HKMA) recently announced a new Fintech Promotion Roadmap (Roadmap), which outlines its key initiatives to be taken over the next 12 months to expedite the growth of the Fintech ecosystem and give stronger impetus to fintech adoption in the Hong Kong financial services sector.

Renewed Era of Crypto Assets Growth in Hong Kong

Dec 13 2022

By Jay Lee

Recently, Hong Kong, through its Financial Services and the Treasury Bureau, pronounced a Policy Statement on Development of Virtual Assets (“VA”) in Hong Kong (the “Policy Statement”), which sets out the government’s vision and next steps to help grow Hong Kong’s VA sector again. Hong Kong hopes to develop “a vibrant sector and ecosystem” for VA in the future. The positions set forth in the Policy Statement are widely welcomed by market participants, who hope it will attract more talented crypto-related businesses back to Hong Kong.

Hong Kong regulators take action against cryptocurrency exchanges and ICOs

Feb 12 2018

By Rizwan Qayyum

Hong Kong’s Securities and Futures Commission (“SFC”) have issued formal warnings to seven cryptocurrency exchanges and seven issuers of initial coin offerings. This follows their initial statement on ICOs released on 5 September 2017, and represents their first regulatory action.

The SFC has sent letters to seven cryptocurrency exchanges “in Hong Kong or with connections to Hong Kong”, which provides a warning that they should not be trading cryptocurrencies which are “securities” as defined in the Securities and Futures Ordinance (“SFO”) without a licence. The exchanges responded immediately, either by confirming that they do not provide trading services for such currencies or took rectification measures, including removing relevant cryptocurrencies from their platforms.

Hong Kong launches regulatory sandbox

Oct 11 2017

By Jonathan Lawrence

The Hong Kong Securities and Futures Commission (SFC) launched a regulatory sandbox on 29 September. The sandbox provides a confined regulatory environment for qualified firms to operate regulated activities under the Hong Kong Securities and Futures Ordinance (SFO) before FinTech is used on a fuller scale to the wider public. The SFC emphasises the importance of the integrity of the market and investors’ interests, and says it will not compromise regulatory requirements which are key to investor protection. For example, a qualified firm operating in the sandbox must be fit and proper and must comply with the applicable financial resources requirements.

FCA’s Hong Kong Hat Trick of FinTech Cooperation Agreements

Sep 25 2017

By Jonathan Lawrence

The UK Financial Conduct Authority (FCA) has completed a hat trick of FinTech cooperation agreements with Hong Kong regulators by signing an agreement with the Hong Kong Insurance Authority (IA). This adds to those agreements already signed by the FCA with the Hong Kong Monetary Authority (HKMA) and the Hong Kong Securities and Futures Commission (SFC) on which we have blogged in previous posts.

Malaysia signs a series of cooperation agreements

Sep 25 2017

By Jonathan Lawrence

On 14 September the Securities Commission Malaysia (SC) announced that it has signed a series of FinTech cooperation agreements with several regulators in major financial centres. The SC has established FinTech bridges with the Hong Kong Securities and Futures Commission (SFC), the Dubai Financial Services Authority (DFSA) and the Monetary Authority of Singapore (MAS). This follows the first agreement signed between the SC and the Australian Securities and Investments Commission (ASIC) in June 2017.

Tag:Hong Kong