- Legislation approved by the Legislative Council will soon let individual investors purchase virtual assets.
- Ahead of new regulations, brokers and investment managers in the area are allegedly seeking guidance on licensing requirements.
According to local sources, financial service companies in Hong Kong are reportedly already starting to offer services to regular investors.
Brokers and investment managers in the region are purportedly looking for advice on licensing requirements ahead of new legislation.
In December 2022, Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) was updated to reflect the region’s current attitude on enabling cryptocurrency trade.
The amendment creates a brand-new licensing program for companies that offer virtual asset services, enabling retail investors to trade in virtual assets. In addition, trading in digital assets is now limited to professionals showing they have at least $1 million in bankable assets.
The first two brokers in Hong Kong to trade digital assets for their corporate clients were Victory Securities and Interactive Brokers.
According to Robert Lui, the leader for digital assets at Deloitte Hong Kong, retail investors should be able to trade digital assets with significant market capitalization and liquidity.
With their headquarters in Hong Kong, brokers can now service clients who trade exchange-traded funds based on Bitcoin and Ether listed on the Hong Kong Stock Exchange. However, for those that provide trading in virtual assets, extra SFC approval is necessary.
At first, the new license was supposed to go into effect on March 1 of this year. However, to offer virtual asset service providers additional time to prepare correctly, the deadline was later moved to June 1.
This comes after Julia Leung was just named the SFC’s new chief executive. Leung took office on January 1 and will hold the position for three years. She has previously voiced support for more stringent local cryptocurrency laws.
Recently, a Central Bank of Hong Kong officer said the institution was researching investor protection laws.
The Anti-Money Laundering and Counter-Terrorist Financing Act was amended by the Legislative Council last month, putting virtual asset service providers within the jurisdiction of the SFC starting in June of this year.
Contrary to the restriction on professional investors, or those with at least HK$8 million in bankable assets, the SFC is expected to issue a consultation paper on how to allow ordinary investors access to trade in virtual assets.
As a result, local financial services companies now have a chance to reach out to ordinary investors.