Hong Kong to authorise virtual asset ETFs - Fund Selector Asia

The Hong Kong authorities has announced plans contiguous to make an ecosystem for virtual assets successful the peculiar administrative region, including issuing licences for virtual assets work providers and authorising virtual assets ETFs.

Currently, lone nonrecreational investors are allowed to commercialized crypto assets.

According to the Hong Kong Securities and Futures Commission’s (SFC) merchandise survey, investors successful Hong Kong bought HK$10bn ($1.27bn) successful virtual assets funds via overseas platforms successful 2021, up from HK$8bn a twelvemonth earlier.

The regulator believes investors present person a amended knowing of the risks of trading these assets and it is present an opportune clip to reappraisal the ‘professional capitalist only’ requirement.

“We person travel to judge that immoderate archetypal concerns astir virtual assets futures ETFs person go manageable and tin beryllium addressed with due safeguards,” said Julia Leung, lawman main enforcement serviceman and enforcement manager for intermediaries astatine the SFC.

“Apart from the existing requirements for ETFs, virtual assets futures ETFs volition besides beryllium taxable to further requirements related to its absorption company, concern strategy, disclosure and capitalist education.”

At the archetypal stage, the underlying assets for the virtual assets ETFs volition beryllium confined to Bitcoin futures and Ether futures traded connected the Chicago Mercantile Exchange, she added.

Hong Kong Exchange and Clearing (HKEX) welcomed the announcement to licence the listing of ETFs with virtual assets arsenic their underlying.

“This volition further fortify Hong Kong’s relation arsenic an planetary fiscal centre, arsenic good arsenic supporting the continued maturation of Hong Kong arsenic Asia’s preferred ETF marketplace,” said Wilfred You, HKEX co-chief operating serviceman and co-head of markets.

“HKEX volition enactment intimately with issuers and different stakeholders towards the instauration of this caller ETF product. We volition update the marketplace arsenic appropriate.”

Apart from having ETFs based connected virtual assets, the authorities is besides looking astatine issuing licences to eligible virtual assets work providers and allowing retail investors entree to virtual assets.

“The cardinal constituent of being a licensee is that erstwhile you get the licence, you tin level up to the accepted fiscal marketplace truthful different licensees successful the accepted fiscal assemblage specified arsenic banks and different institutions tin beryllium your distributor specified that you tin pat into the immense marketplace of plus and wealthiness absorption worthy implicit $4.5trn,” said Christopher Hui, caput for fiscal services and the treasury, astatine the Hong Kong Fintech Week.