- Hong Kong’s SFC unveils new laws for digital asset buying and selling platforms.
- Most respondents welcomed the proposed necessities.
- Failure to conform will outcome within the orderly closure of companies.
The Securities and Futures Fee (SFC), an unbiased statutory physique liable for regulating the securities and futures markets in Hong Kong, has launched the findings of its session on proposed regulatory necessities for operators of buying and selling platforms. digital property accredited by the SFC. The SFC acquired 152 written submissions in the course of the session, together with feedback from business associations, market individuals and different stakeholders.
Based on SFC, most respondents welcomed the proposed necessities, with some asking for additional clarification. The SFC has amended and clarified the proposed laws in response to feedback acquired.
One of many key points of the proposal is the authorization for licensed buying and selling platform operators to serve retail traders, which acquired sturdy assist from respondents. The SFC will implement suitability checks upon onboarding, enhanced token due diligence, enhanced governance, admission standards and disclosures to guard these traders.
Julia Leung, CEO of SFC, highlighted the significance of offering clear regulatory expectations to advertise accountable improvement. Hong Kong’s complete regulatory framework follows the precept of “similar enterprise, similar dangers, similar guidelines” to offer sturdy investor safety and handle key dangers, foster sustainable progress and assist business innovation.
Efficient June 1, 2023, the Tips for Operators of Digital Asset Buying and selling Platforms will set out numerous necessities, together with safe custody of property, segregation of consumer property, prevention of conflicts of curiosity, and requirements for cybersecurity. The SFC will present further steering on new regulatory necessities, together with license utility procedures and transitional preparations.
The SFC encourages operators of digital asset buying and selling platforms keen to adjust to regulatory requirements to use for a license. Based on the SFC, those that select not to take action ought to proceed with an orderly shutdown of their enterprise in Hong Kong. Moreover, the SFC will proceed to work with the Investor and Monetary Training Council to teach traders in regards to the dangers of buying and selling on unregulated platforms.