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Revamped SFC and HKMA guidance applies to intermediaries that distribute products or provide dealing, advisory, and asset management services related to virtual assets.

By Simon Hawkins and Adrian Fong

On 20 October 2023, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) issued a joint circular (Joint Circular) to provide updated guidance to intermediaries conducting virtual asset (VA) activities. The Joint Circular revises a previous joint circular issued on 28 January 2022 (see Latham’s Client Alert).

The need to update the 2022 joint circular emerged after a new regulatory regime for virtual asset trading platforms (VATP) was launched in June 2023, which allowed such platforms to onboard retail investors (see Latham’s Client Alert) for the first time.

The regulatory perimeter continues to expand as the Securities and Futures Commission introduces a comprehensive regime to regulate virtual asset service providers.

By Simon Hawkins and Adrian Fong

In December 2022, Hong Kong passed the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 (Amendment Bill), which will establish a new licensing regime and statutory framework for virtual asset service providers from 1 June 2023. Initially, the Amendment Bill will apply to anyone operating a centralised virtual asset trading platform in Hong Kong or actively marketing such services to the Hong Kong public.

Regulators released comprehensive guidance to banks, intermediaries, and insurers on virtual asset-related activities.

By Simon Hawkins and Adrian Fong

On 28 January 2022, Hong Kong’s principal financial services regulators issued much-anticipated guidance to banks, securities firms, and insurers looking to undertake activities related to virtual assets (VAs). In particular:

  • The Hong Kong Monetary Authority (HKMA) issued a circular to banks on “Regulatory approaches to Authorized Institutions’ interface with Virtual Assets and Virtual Asset Service Providers” (HKMA Circular).
  • The HKMA and

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The Hong Kong government has issued its widely anticipated consultation conclusions on a new framework to regulate virtual asset exchanges.

By Simon Hawkins and Kenneth Y.F. Hui

On 21 May 2021, the Hong Kong Financial Services and the Treasury Bureau (FSTB) issued its consultation conclusions (Conclusions) on the introduction of a new regulatory framework in Hong Kong to licence and regulate virtual asset exchange (VA Exchange) operators.

New regulatory framework

The Conclusions adopt most of the proposals set out in the FSTB’s November 2020 consultation paper (Consultation Paper), as summarized in our Client Alert “Hong Kong Consults on a New Licensing Regime to Regulate Virtual Assets Exchanges”.

Hong Kong’s Securities and Futures Commission introduces new licensing regime to regulate previously unregulated markets and restates expectations regarding security token offerings.

By Simon Hawkins, Kieran Donovan, and Kenneth Y.F. Hui

The second day of Hong Kong Fintech Week again brought together regulators and market participants from across the fintech industry for a range of insightful discussions.

Ashley Alder, Chief Executive Officer of the Securities and Futures Commission (SFC), delivered the day’s biggest headline in his keynote speech, announcing that the Financial Services and Treasury Bureau (FSTB) would be issuing a consultation paper proposing a new licensing regime for virtual asset service providers (VASPs), effectively creating a legal framework that brings previously unregulated activities within the SFC’s regulatory perimeter. (Further analysis is available in Latham’s Client Alert on the proposed framework.)

SFC outlines new regulatory framework for virtual asset trading platforms, HKMA highlights recent FinTech initiatives, and PBOC discusses China’s forthcoming central bank digital currency.

By Simon Hawkins and Kenneth Y.F. Hui

The fourth annual Hong Kong FinTech Week conference kicked off with a major announcement from Mr. Ashley Alder, Chief Executive Officer of the Securities and Futures Commission (SFC), who introduced a new, formalized regulatory framework for virtual asset trading platforms (VATPs). A panel of central bankers also discussed stablecoins and central bank digital currencies, including the People’s Bank of China’s (PBoC) forthcoming central bank digital currency, referred to as the digital currency / electronic payment (DCEP) coin.

The SFC’s guidance provides helpful clarity amidst growing interest in security token offerings.

By Simon Hawkins and Kenneth Hui

On 28 March 2019, the Hong Kong Securities and Futures Commission (SFC) issued a policy statement on security token offerings (STOs) summarizing the legal and regulatory requirements applicable to parties engaging in STOs. This guidance follows the SFC’s 5 September 2017 policy statement on initial coin offerings (ICOs).

STOs typically refer to specific offerings which are structured to have features of traditional securities offerings, and involving security tokens that are digital representations of ownership of assets (e.g., gold or real estate) or economic rights (e.g., a share of profits or revenue) using blockchain technology.