Hong Kong has announced that retail investors can trade cryptocurrencies under new rules for the digital asset industry, with the Hong Kong Securities and Futures Commission (SFC) this afternoon detailing a consultation conclusion document on retail participation. It is expected that individual investors will be able to trade mainstream cryptocurrencies such as BTC and ETH from June 1st with appropriate safeguards.
The SFC document shows opinions on requiring non-security tokens to have a track record of at least 12 months. Regulatory arrangements for stablecoins are expected to be implemented in 2023/24. Stablecoins should not be included for retail trading until they are regulated in Hong Kong. Regarding proprietary trading, the SFC agrees that liquidity on the trading platform is very important to customers. Therefore, SFC allows liquidity provision activities by third-party market makers. However, the current prohibition on proprietary trading is comprehensive and effectively prohibits group companies of licensed virtual asset trading platforms from holding any virtual asset positions.
The SFC stated that platform operators should not provide incentive activities related to the purchase and sale of specific virtual assets. This principle forms the basis for stipulating that platform operators should not publish any advertisements related to specific virtual assets. Regarding other common services in the virtual asset market (such as income, deposits and lending), the SFC does not allow licensed virtual asset trading platforms to provide these services. (Bloomberg)
