The Securities and Futures Commission (SFC) issued two circulars outlining its expectations for SFC-licensed virtual asset trading platform operators (Platform Operators) to enhance liquidity and broaden product offerings.

One circular allows Platform Operators to combine their orders with those of affiliated overseas virtual asset trading platforms in a shared order book, marking the first step under Pillar A (Access) of the ASPIRe roadmap to attract global platforms, order flows and liquidity providers.

Cross-platform order matching and execution is expected to improve market liquidity and pricing for Hong Kong investors, with safeguards in place to mitigate associated risks.

The SFC will next consider whether licensed brokers can direct client orders to regulated overseas liquidity pools within the same group.

The second circular permits Platform Operators to offer trading in virtual assets without a 12-month track record for professional investors, and for Hong Kong Monetary Authority-licensed stablecoins.

It also allows distribution of tokenised securities and digital asset-related investment products, supporting Pillar P (Products) of the roadmap.

Associated entities of Platform Operators may provide custody services for virtual assets or tokenised securities not traded on their platforms.

“Making steady strides in market liquidity and business offerings is crucial to sustaining the growth momentum of Hong Kong’s digital asset ecosystem,”

said Julia Leung, the SFC’s Chief Executive Officer.

“Today, we take a significant step to connect with global liquidity, underscoring our commitment to striking a right balance in fostering market innovation and vitality while upholding high standards for investor protection and market integrity.”

Featured image credit: Edited by Fintech News Hong Kong, based on image by pvproductions via Freepick