Hong Kong’s regulator, the Securities and Futures Commission (SFC), will allow licensed crypto exchanges to offer trading services to retail investors. According to a recently published announcement, the financial watchdog informed that crypto services providers will be able to apply for licenses and be allowed to operate in the city.
Hong Kong to Allow Crypto Companies to Offer Services to Retail Investors
The SFC will allow crypto services providers to offer trading solutions to individuals in Hong Kong. There have been exactly 152 written submissions presented by different professional associations and market participants. The goal was to better understand the requirements and search for clarifications about the proposed regulatory requirements for Virtual Asset Trading Platforms.
According to Ms Julia Leung, SFC’s CEO, it is key to provide clear regulatory expectations in order to foster responsible development in this area. Moreover, she stated that the framework will follow the principle of “same business, same risks, same rules.” In this way, the goal is to create the correct environment for the industry to develop support and innovation.
It is worth taking into consideration that these guidelines will be effective starting on June 1st, 2023. Some of the things that the new guidelines consider include the following:
- Safe custody of assets
- Segregation of client’s funds
- Apply the highest cybersecurity standards
- Apply to licensing
- Avoid conflict of interests
With all these considerations, companies that would like to operate in the market will have to apply for a license. This would allow several firms to start offering services to new retail investors that were before left out of the market due to a lack of compliant applications and companies.
In the future, other jurisdictions in the world could apply crypto-friendly regulations in order for companies to create new and reliable services for the community.