Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of finance and cryptography.
Report – Regulation Bitcoin News
Hong Kong’s Securities and Futures Commission (SFC) is “actively seeking” to create a regulatory framework allowing crypto futures exchange-traded funds (ETFs), an SFC official said. “We have come to believe that some initial concerns about virtual asset futures ETFs have become manageable and can be addressed with proper safeguards.”
Growing demand for crypto ETFs in Hong Kong
Hong Kong’s top financial regulator is “actively” looking to set up a regulatory framework that would allow retail investors to trade exchange-traded funds (ETFs) with exposure to cryptocurrency futures, Ignite’s Asia reported on Monday. The publication quoted Julia Leung, deputy managing director and managing director of the Intermediaries Division at the Securities and Futures Commission (SFC).
Leung is reported to have said last week during his keynote address at Hong Kong Fintech Week that the SFC is “actively looking to set up a regime to authorize ETFs that provide mainstream virtual assets with appropriate investor protection”.
She explained that initially the Securities and Futures Commission will only allow ETFs that invest in bitcoin futures and ether futures traded on the Chicago Mercantile Exchange (CME).
The SFC published a circular on October 31 outlining the requirements under which it “would consider approving exchange-traded funds (ETFs) that obtain exposure to virtual assets (VAs) primarily through futures contracts (VA Futures ETFs) for public offering in Hong Kong,” the regulator elaborated:
A wide range and a greater number of investment products providing exposure to VAs, including VA-related ETFs offered in various markets globally, are now available to both retail and professional investors and have become increasingly popular. Correspondingly, the demand for such products has increased in Hong Kong.
The circular further states that the SFC “is prepared to accept applications for the authorization of VA Futures ETFs.”
A regulatory framework for cryptoassets was first issued in November 2018 that limits access to professional investors. Defending the decision to deny retail investors trading crypto, Leung said: “Given the novelty of our framework and the high volatility of crypto assets, we felt it was prudent to impose an overall ‘professional investor’ restriction.”
However, the CEO emphasized that Hong Kong’s crypto ecosystem had made “significant progress” over the past four years. During this time, the SFC had gained more experience in regulating crypto trading platforms and fund firms, she elaborated:
We have come to believe that some initial concerns about virtual asset futures ETFs have become manageable and can be addressed with proper safeguards.
“Now is an opportune time to review the ‘professional investors only’ requirement,” she added, stressing that the SFC is preparing to adjust its “regulatory response and allow retail access” to security token offerings with certain safeguards in place.
What do you think about Hong Kong wanting to establish a regulatory framework to allow crypto futures ETFs for retail investors? Let us know in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly responsible for damages or losses caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
