Hong Kong’s Securities and Futures Commission (SFC) is expediting the license approval process specifically for deemed-to-be-licensed virtual asset trading platforms (VATPs).

Announced during Hong Kong Fintech Week 2024, Dr. Eric Yip, the SFC’s Executive Director of Intermediaries, highlighted the commission’s initiatives aimed at balancing fintech growth with investor safeguards.

The SFC aims to grant the first batch of formal licenses to these deemed-to-be-licensed VATPs by the end of this year.

The regulator will leverage existing regulatory tools, including risk-based on-site inspections and direct engagement with applicants’ senior management.

To further support the growth of licensed VATPs, the SFC is establishing a consultative panel, slated to launch in early 2025, with representatives from each VATP licensee to provide feedback on policymaking.

This panel’s discussions will contribute to a forthcoming white paper outlining regulatory priorities for the virtual asset industry.

Additionally, the SFC is collaborating with the Hong Kong government and other regulatory bodies to develop comprehensive regulations for both virtual asset trading and custody services.

The SFC said it remains committed to supporting tokenisation initiatives and is actively involved as a core member of the Hong Kong Monetary Authority’s Project Ensemble.

Project Ensemble aims to establish industry standards for tokenised asset settlement, building necessary infrastructure to support Hong Kong’s tokenisation ecosystem.

“The SFC will continue to adopt a pragmatic and proactive approach in building and advancing a holistic regulatory framework, to strike a balance between market development and investor protection,”

said Dr. Yip.

He added that the SFC will enhance investor protection efforts through proactive monitoring systems and public alerts while increasing collaboration with other agencies.