Hong Kong SFC VA guidelines expand scope for licensed VA brokers
As reported by The Block, hong kong’s Securities and Futures Commission (SFC) issued new guidelines allowing licensed virtual asset brokers to expand their service scope. The update covers financing for crypto trading with a broader range of collateral.
The same guidance opens the door to crypto margin financing and perpetual trading in Hong Kong, and broadens scope for affiliated market-making. The move signals a coordinated path for regulated participation in virtual assets.
The change formalizes a path for intermediaries that already hold SFC licenses to operate in virtual assets, alongside engagement with the Hong Kong Monetary Authority (HKMA). It is designed to integrate digital-asset activity into existing regulatory architecture.
Why it matters: SFC-HKMA parity and stronger risk controls
According to Sidley Austin, the reforms align with a “same activity, same risk, same rules” approach across the SFC and HKMA, enhancing parity with traditional markets. This raises governance expectations for intermediaries dealing in virtual assets.
Risk controls move to the forefront. Brokers will need collateral standards, conservative haircuts, and disclosures comparable to securities margin lending to manage volatility and counterparty risks.
Strengthened custody, segregation of client assets, and AML/CTF controls are positioned as foundational guardrails, even as the guidelines aim to deepen liquidity. The policy balance targets market development with discipline.
Immediate impact on brokers, crypto margin financing, and investors
Licensed brokers face immediate operational work: updating margin policies, collateral management, client documentation, and connectivity to compliant liquidity providers. Implementation speed will depend on internal readiness and supervisory feedback.
For financing, the broader collateral scope may unlock balance-sheet efficiency, but it also increases the importance of dynamic risk monitoring and stress testing. Product governance and disclosure will shape client uptake.
For investors, access will depend on eligibility and product risk disclosures. Retail availability of complex derivatives such as perpetuals will be shaped by the detailed rules and supervision.
At the time of writing, bitcoin trades near $66,906, based on data from TradingView. This provides context for volatility as brokers calibrate haircuts and concentration limits.
Compliance for licensed virtual asset brokers: collateral and safeguards
Permitted services: crypto margin financing, perpetual contracts, and market-making
Under the new framework, licensed virtual asset brokers can extend into crypto margin financing, offer perpetual contracts within regulatory limits, and support market-making activities through affiliated units where permitted. Execution channels will be expected to align with licensing and disclosure standards.
Custody, AML/CTF, haircuts, and HKMA-SFC parity (Julia Leung)
Regulatory safeguards emphasize custody discipline, segregation, and AML/CTF screening. Julia Leung, CEO of the SFC, has outlined that brokers may accept bitcoin and ether as collateral for margin financing, subject to prudent haircuts akin to securities.
“Virtual assets have become a tool in the race for financial supremacy,” said Julia Leung, CEO of the SFC.
The broader supervisory goal is parity between banking and securities oversight on virtual assets as activities converge. Controls are expected to scale with product complexity and market volatility.
FAQ about Hong Kong SFC virtual asset guidelines
Can bitcoin and ether be used as collateral for margin financing, and what haircuts or risk controls apply?
Yes. BTC and ETH collateral are allowed, with conservative haircuts and controls comparable to securities margin lending under the new broker guidelines.
Are perpetual contracts available to retail investors or only professional investors in Hong Kong?
Perpetual contracts are initially expected to be limited to professional investors, as reported by China Daily Hong Kong.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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