Hong Kong’s Securities and Futures Fee (SFC) is “actively wanting” to create a regulatory framework that permits crypto futures exchange-traded funds (ETFs), an SFC official reportedly stated. “We now have come to consider that some preliminary issues about digital asset futures ETFs have turn out to be 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 permits 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 stated 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 belongings with applicable investor guardrails.”
She defined that originally, the Securities and Futures Fee will solely enable ETFs that spend money on bitcoin futures and ether futures traded on the Chicago Mercantile Change (CME) trade.
The SFC revealed a round on Oct. 31 outlining the necessities beneath which it “would contemplate authorizing exchange-traded funds (ETFs) that acquire publicity to digital belongings (VAs) primarily by 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 accessible to each retail {and professional} buyers and have turn out to be more and more well-liked. Equally, demand for such merchandise has elevated in Hong Kong.
The round additional states that the SFC “is ready to just accept purposes for authorization of VA Futures ETFs.”
A regulatory framework for crypto belongings was first issued in November 2018 proscribing entry to skilled buyers. Defending the choice to disallow retail buyers to commerce crypto, Leung stated: “Given the novelty of our framework and the excessive volatility of crypto belongings, we believed it was prudent to impose an overarching ‘skilled investor’ restriction.”
Nonetheless, the manager director emphasised that Hong Kong’s crypto ecosystem had made “substantial development” previously 4 years. Throughout this time, the SFC had gained extra expertise in regulating crypto buying and selling platforms and fund companies, she detailed, elaborating:
We now have come to consider that some preliminary issues about digital asset futures ETFs have turn out to be manageable and will be addressed with correct safeguards.
“It’s now an opportune time to overview the ‘skilled investor solely’ requirement,” she added, emphasizing that the SFC is making ready to regulate its “regulatory response and enable retail entry” to safety token choices with sure safeguards in place.
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