Hong Kong’s SFC Has Received Multiple Requests for Crypto ETFs

In recent months, the Hong Kong Securities and Futures Commission (SFC) has received “a number” of requests from local companies that want to offer crypto-related exchange-traded funds (ETFs) to their private bank and professional clients, SFC Deputy Chief Executive Officer and Executive Director Julia Leung said.

• Speaking at Hong Kong Fintech Week, the SFC director gave a “glimpse” of the regulatory issues involved with ETFs including whether retail users be allowed access to crypto ETFs through online brokers, and should they face additional restrictions compared to non-crypto ETFs.
• However, she did not give any indication of the regulator’s decisions on ETFs.
• The SFC is currently reviewing its regulatory regime for crypto to see if it is still “fit for purpose,” Leung said.
• Under the regime, virtual asset service providers have to be licensed to operate in Hong Kong and can only offer services to professional investors, defined as individuals with a portfolio of over HK$8 million (US$1 million) or companies with more than $5 million in total assets. SFC-regulated fund managers can invest up to 10% of their gross asset value in crypto, and can apply for a special license if they wish to invest more.
• Last month, the U.S. Securities and Exchange Commission approved the first bitcoin futures ETF.
• In August, Leung said that Hong Kong should crack down on unlicensed crypto trading.