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Vladislav Sopov
Hong Kong Securities and Futures Fee (SFC) up to date rules of operations with crypto and crypto ETFs
Contents
The Securities and Futures Fee (SFC) and the Hong Kong Financial Authority (HKMA) issued a really complicated round to make clear the principles for firms providing companies in some way associated to digital belongings. A few of these belongings are thought of “complicated merchandise” which can be explicitly prohibited from being launched to retail purchasers.
Digital belongings are “complicated merchandise” just for skilled buyers, new HK round says
Digital assets-related merchandise which can be thought of complicated merchandise ought to solely be provided to skilled buyers, as per the brand new document known as Joint Round On Intermediaries’ Digital Asset-Associated Actions issued by Hong Kong watchdogs yesterday, Oct. 20, 2023.
The discharge of the doc was noticed by the Chinese language crypto journalist Colin Wu.
Nevertheless, the precise definition of “complexity” stays too imprecise within the doc. As an example, its authors added that an abroad VA non-derivative ETF would “very seemingly” be thought of a fancy product that ought to solely be obtainable to professionals.
On the identical time, some exchange-traded VA derivatives traded on regulated exchanges specified by the SFC nonetheless may be authorized for providing to retail buyers.
Even when authorized for work with retail non-qualified buyers, the companies ought to conduct “digital belongings information assessments” and educate their purchasers in regards to the alternatives and dangers of cryptocurrency markets.
Additionally, the doc specified new guidelines for asset administration funds that work with cryptocurrency belongings and cryptocurrency advisors.
Hong Kong lawmakers sending blended indicators
As an example, each advisor ought to test the amount of liquidity for an asset they advocate and its listings monitor on varied exchanges:
Intermediaries ought to, at a minimal, make sure that the digital asset is an eligible large-cap digital assete, it ought to have been included in a minimal of two acceptable indices issued by at the least two completely different index suppliers
This rule might also have an effect on the section of crypto advertising and marketing and promoting, as no particular guidelines for selling cryptocurrencies had been launched.
In 2023, Hong Kong regulators issued quite a lot of varied crypto-related statements. As an example, in June 2023 they had been mentioned to “force” native banks to begin working with crypto-friendly companies.
Two weeks later, the pinnacle of the HK SFC warned that making Hong Kong a world buying and selling hub for crypto was by no means the purpose of his fee.
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