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Hong Kong’s Securities and Futures Fee (SFC) is “actively wanting” to create a regulatory framework that permits crypto futures exchange-traded funds (ETFs), an SFC official reportedly stated. “We have now come to consider that some preliminary issues about digital asset futures ETFs have turn into manageable and might be addressed with correct safeguards.”
Rising Demand for Crypto ETFs in Hong Kong
Hong Kong’s high monetary regulator is “actively wanting” to arrange a regulatory framework that permits retail buyers to commerce exchange-traded funds (ETFs) with publicity to cryptocurrency futures, Ignites Asia reported Monday. The publication cited Julia Leung, deputy chief government officer and government director for the Intermediaries Division on the Securities and Futures Fee (SFC).
Leung reportedly stated final week throughout her keynote speech at Hong Kong Fintech Week that the SFC is “actively seeking to arrange a regime to authorize ETFs that present mainstream digital property with acceptable investor guardrails.”
She defined that originally, the Securities and Futures Fee will solely permit ETFs that put money into bitcoin futures and ether futures traded on the Chicago Mercantile Trade (CME) trade.
The SFC printed a round on Oct. 31 outlining the necessities underneath which it “would contemplate authorizing exchange-traded funds (ETFs) that receive publicity to digital property (VAs) primarily by way of futures contracts (VA Futures ETFs) for public providing in Hong Kong,” the regulator detailed, elaborating:
A broad vary and bigger variety of funding merchandise offering publicity to VAs, together with VA-related ETFs provided in varied markets globally, are actually obtainable to each retail {and professional} buyers and have turn into more and more common. Equally, demand for such merchandise has elevated in Hong Kong.
The round additional states that the SFC “is ready to simply accept functions for authorization of VA Futures ETFs.”
A regulatory framework for crypto property was first issued in November 2018 limiting entry to skilled buyers. Defending the choice to disallow retail buyers to commerce crypto, Leung stated: “Given the novelty of our framework and the excessive volatility of crypto property, we believed it was prudent to impose an overarching ‘skilled investor’ restriction.”
Nonetheless, the chief director emphasised that Hong Kong’s crypto ecosystem had made “substantial development” up to now 4 years. Throughout this time, the SFC had gained extra expertise in regulating crypto buying and selling platforms and fund companies, she detailed, elaborating:
We have now come to consider that some preliminary issues about digital asset futures ETFs have turn into manageable and might be addressed with correct safeguards.
“It’s now an opportune time to evaluation the ‘skilled investor solely’ requirement,” she added, emphasizing that the SFC is making ready to regulate its “regulatory response and allow retail access” to safety token choices with sure safeguards in place.
What do you consider Hong Kong seeking to set up a regulatory framework to permit crypto futures ETFs for retail buyers? Tell us within the feedback part beneath.
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