After the “Hong Kong Fintech Week” on October 31, Hong Kong issued an exciting digital asset policy. The local government is ambitious to re-establish Hong Kong as a virtual asset center, welcoming global crypto companies and talents, opening to virtual asset exchanges, digital tokens, and applications that use smart contracts. Anh the most prominent is the launch of a crypto exchange-traded fund ETF.
Specifically, the Hong Kong Securities and Futures Commission (SFC) detailed the basic requirements that ETF managers need to meet in order to list crypto products in the city. Summarize with the following highlight points:
– Any product must meet the requirements for managing trust funds, mutual funds, and unlisted structured products.
– The ETF issuer must present a minimum three-year track record and be subject to regulatory compliance.
– Issuers need to prove that the ETF digital asset has sufficient liquidity.
– The level of net derivative risk should be at most 100% of the total net asset value of the ETF.
– Issuers need to educate investors before launching.
“The Securities and Futures Commission will be conducting a public consultation on how retail investors may be given a suitable degree of access to VA (virtual assets), and Hong Kong will be open to the possibility of having Exchange Traded Funds (ETFs) on VA in our market,” SFC said.
Overall, the regulator said Hong Kong is willing to develop the fintech industry with a focus on NFTs, metaverse, and Web3. The government has been running pilot projects to explore the benefits of cryptos in financial markets. In addition, the administration has re-emphasized its involvement in China’s vast experiment with central bank digital currencies.
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