Hong Kong Issues Request For Crypto Futures ETF Issuers

The Hong Kong Securities and Futures Commission (SFC) released a detailed circular listing the conditions exchange-traded fund managers must achieve in order to list their crypto products in the city on Monday.

The list is part of a larger push by municipal officials to re-establish Hong Kong as a virtual asset hub. On Monday, the finance minister and other top officials unveiled efforts to encourage crypto-related businesses, including simpler trading laws.

The regional administration of Hong Kong also re-emphasized its participation in China’s larger experiment with central bank digital currency.

“In light of these developments, the SFC has been actively looking into a regime that would enable the authorisation of investment products providing exposure to VAs and would meet investor demands with appropriate safeguards from an investor protection perspective,” according to the circular.

ETF issuers to affirm virtual asset ETFs have adequate liquidity for operation and prove that contracts are manageable and how roll costs will be handled.

Furthermore, virtual assets futures ETF issuers have an excellent track record of regulatory adherence and a demonstrated track record of administering ETFs for at least three years.

Another condition highlighted by the SFC was that the management business of virtual assets ETFs provides flexibility in portfolio composition, rolling strategy, and dealing with market uprising occurrences. In addition, before the introduction of the VA Futures ETF in Hong Kong, extensive investor education will be conducted.

On Monday, the HKSAR government issued its most recent policy statement on the prognosis for virtual asset growth, which included issuing tokenized green bonds and the preparations for establishing the digital Hong Kong Dollar.

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