The Hong Kong Securities and Futures Commission (SFC) has recently released a comprehensive circular outlining the latest regulations concerning licensed virtual asset exchanges. This circular primarily addresses two key areas: liquidity sharing across virtual asset trading platforms and the expansion of products and services offered by these platforms.
The first circular, titled "Circular on Virtual Asset Trading Platform Liquidity Sharing," details the policy guidelines regarding liquidity sharing. The SFC is considering allowing licensed virtual asset trading platforms to share global order books with their overseas affiliated platforms, as well as exploring mechanisms for brokers to access international liquidity. This initiative aims not only to empower local investors with access to global liquidity but also to further solidify Hong Kong's position as a global digital asset trading hub.
However, the SFC emphasizes that this openness comes with enhanced regulatory and supervisory requirements to protect investors. Platforms must adopt Delivery Versus Payment (DVP), same-day settlement, and monitor upper limits on unsettled transactions. Additionally, they must establish a reserve fund in Hong Kong no smaller than the upper risk exposure and provide insurance/compensation arrangements to cover settlement asset risks. Market surveillance must also be standardized and provide the SFC with real-time transaction and client data. Before servicing retail investors, platforms must fully disclose risks, obtain client consent, and submit a written approval application with additional terms and conditions.
Under this stringent and clear regulatory framework, HashKey Exchange is poised to benefit from its network of licensed compliant exchanges in Hong Kong, Bermuda, and the Middle East. As these policies are gradually implemented, HashKey can connect to global order books in its licensed capacity, providing global investors with more competitive services while meeting regulatory requirements.
The second circular, "Circular on Expanding Products and Services of Virtual Asset Trading Platforms," outlines the expanded admission standards for tokens. Virtual assets without a 12-month trading history will now be accessible to professional investors and stablecoin issuers. Furthermore, licensed platforms will be able to distribute digital assets and digital securities-related products. This allows HashKey Exchange to streamline virtual asset listing processes efficiently and effectively within the compliance framework, meeting the needs of institutions for diversified asset allocation.
With growing interest in RWAs (Real World Assets) and wealth management products, these regulatory updates provide clearer institutional guidance for the industry. HashKey Exchange is committed to supporting policy direction and continuously expanding service capabilities to provide clients with richer, safer, and compliant digital asset products.
Additionally, the new policy guidance allows licensed platforms to offer custody services to other institutions, even if the related assets are not traded on their platform. There is also consideration for expanding the license scope to include virtual asset consulting and management services, creating a more comprehensive regulatory ecosystem. HashKey Exchange has already accumulated extensive practical experience in compliant custody and risk management. With the opening of consulting and asset management licenses, we anticipate further extending our service boundaries, building a comprehensive service system covering trading, custody, investment consulting, and management, helping Hong Kong solidify its leading position as a global digital asset hub.
The SFC actively participates in developing global regulatory standards, striving for consistency across markets. This aligns with HashKey Exchange's long-term commitment to "compliance first." In the future, we will continue to prioritize compliance and innovation, working closely with regulators and industry partners to build a more robust, secure, and open digital asset ecosystem, helping Hong Kong solidify its global digital asset hub status.
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