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The push into the retail market will notably help the firm establish itself as one of the companies championing the growth of digital currencies through products offered on regulated trading platforms.
Hong Kong-based asset management firm, Huobi Tech is looking at expanding its product offerings in the country with the launch of an Exchange Traded Fund (ETF) product that will track digital assets. As reported by the South China Morning Post (SCMP), the company has filed its application with the Securities and Futures Commission (SFC) and it is targeted at retail investors whose total assets are less than HK$8 million ($1 million).
Having “all the trading and redemption done directly in Hong Kong … would give better protection to investors, as the fund will be regulated under Hong Kong law,” said Huobi Tech’s senior vice-president Romeo Wang, without commenting on Huobi’s application. “We will keep close and positive communications with regulators including the SFC” to “obtain the proper licenses and approvals.”
While Hong Kong regulators are relatively crypto-friendly, the allowance for investing in regulated securities is typically limited to professional investors. This class of investors includes those with total assets of more than $1 million. The move by Huobi Tech to file for the crypto-linked ETF stems from the relaxation of the rules by Hong Kong authorities. It is worthy of note that the company has no affiliations with the Huobi Global exchange and operates independently.
Prior to this time, Huobi Tech has been managing a number of regulated funds for professional crypto traders with other startups including Axion Global Asset Management, Venture Smart Asia, and Fore Elite Capital Management amongst the latest fund managers that have been approved for related products.
“As more capital is allocated to virtual assets, fund managers in Hong Kong are trying to see what opportunities there are to offer products to investors,” said Chris Pigott, the head of Asia ETF services in Hong Kong at Brown Brothers Harriman, a US custodian. “More innovative products in the form of ETFs is a natural next step” for Hong Kong, he said.
Huobi Tech ETF to Help Meet Demands for Digital Assets in Asia
Just as is common in various regions, the demand for digital assets is growing in Asia and fund managers are always looking for avenues to help fulfill this demand.
The proposed ETF product from Huobi Tech is one of such ways that is currently being explored by the Hong Kong-based startup. The push into the retail market will notably help the firm establish itself as one of the companies championing the growth of digital currencies through products offered on regulated trading platforms.
Away from Hong Kong, major economies in the European Economic Area (EEA) are also warming up to regulated products that seek to cater to the growing demand for digital currencies. The US currently has a number of active futures-based ETF products approved last year, however, the Securities and Exchange Commission (SEC) is yet to approve a full-fledged ETF product, either for professional investors as it is in Hong Kong or for retail traders.
It is obvious that there is uniformity in the embrace of digital assets around the world, however, the discrepancies in regulations are sure to make these assets embrace development at a varying pace.