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Hong Kong SFC Reviewing 2018 Crypto ETF Rules Following Huge Crypto Adoption

UTC by Steve Muchoki · 3 min read
Hong Kong SFC Reviewing 2018 Crypto ETF Rules Following Huge Crypto Adoption
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An earlier survey by the Hong Kong Securities and Futures Commission (SFC) shows that approximately 54 percent of investors have purchased funds via online platforms.

The Hong Kong Securities and Futures Commission (SFC) has said that it is reviewing the 2018 crypto ETF rules to see if they are still applicable, following a huge crypto adoption. Notably, the rules limited crypto transactions through funds or trading platforms to professional investors at least HK$8 million. According to SFC deputy chief executive Julia Leung Fung-yee, crypto adoption has significantly increased during the coronavirus pandemic.

“In fact, the distribution of investment products is one area where the pandemic and work-from-home really accelerated the use of technology,” Leung said.

Notably, an earlier survey by the Hong Kong Securities and Futures Commission (SFC) shows that approximately 54 percent of investors have purchased funds via online platforms. Additionally, online sales accounted for approximately 20 percent of all funds sold in Hong Kong. Worth noting, the number of licensed corporations by the Securities and Futures Commission (SFC) that sells funds via online basis more than doubled in the past year.

An indication more retail investors have entered online trading during the past two years when most businesses shut down due to Covid related issues.

Notably, the Hong Kong Securities and Futures Commission that is entirely independent although considered a government to a branch of the government is working with the Hong Kong Monetary Authority (HKMA) to oversee the review process.

“These questions involve complicated issues because the regulatory landscape is still very uneven,” Leung said. “Some licensed firms wish to provide cryptocurrency trading services to clients either by acting as an introducing agent or through an omnibus account arrangement opened at a virtual asset platform.”

Hong Kong Securities and Futures Commission and the Crypto Industry

The Hong Kong Securities and Futures Commission is scrambling to get the crypto industry regulated amid heightened demand from retail and institutional investors. The crypto industry has grown to over $2.8 trillion in the last few weeks following Bitcoin’s breakout to a new all-time high.

While other leading global economies including Canada and the United States approve crypto ETF. Hong Kong regulators have not yet approved any crypto ETF for trading. Mostly influenced by a prior crypto ban by the Chinese regulators prohibiting financial institutions from processing crypto-related transactions.

However, the tidal wave is pushing world regulators towards approving crypto ETFs for institutional and private investors to enter into the crypto industry.

According to Leung, the SFC and the HKMA will adopt the principle of “same business, same risks, and same rules” on financial institutions.

Cryptocurrency news, Funds & ETFs, Market News, News
Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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