Hong Kong Will Soon Accept Crypto Exchange License Applications
by Fintech News Hong Kong May 24, 2023The Hong Kong Securities and Futures Commission (SFC) announced that it will soon allow licensed trading platform operators to serve retail investors following positive feedback from its consultation paper.
On 1 June 2023, the SFC will begin enforcing the guidelines for Virtual Asset Trading Platform operators.
The guidelines will include, safe custody of assets, segregation of client assets, avoidance of conflicts of interest and cybersecurity standards and requirements expected of licensed trading platforms among others.
The SFC will also provide additional guidance on the new regulatory requirements and other implementation details including license application procedures.
The SFC said that virtual asset trading platform operators who are prepared to comply with the SFC’s standards are welcome to apply for a license. Those who do not plan to do so were instructed to proceed to an orderly closure of their business in Hong Kong.
The regulator will be implementing a number of measures to protect these investors including ensuring suitability in the onboarding process, good governance, enhanced token due diligence, admission criteria and disclosures.
The SFC stressed that it has yet to approve any virtual asset trading platform to provide services to retail investors and most virtual asset trading platforms currently accessible by the public are not regulated.
The commission added that it will continue its efforts with the Investor and Financial Education Council to warn investors about the risks of trading on unregulated platforms.
Julia Leung, the SFC’s Chief Executive Officer said that providing clear regulatory expectations is the key to fostering responsible development.
Julia Leung
“Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks. This will enable the industry to develop sustainably and support innovation.”
she added.
