# Hong Kong Securities and Futures Commission Releases New Regulatory Framework

On April 20, the Hong Kong Securities and Futures Commission announced a new regulatory framework, to promote secondary market trading of tokenized investment products recognized by the Hong Kong Securities and Futures Commission in Hong Kong. It is understood that this move is intended to long-term promote digital asset trading activities in Hong Kong and support the further flourishing of the ecosystem.

Under the new arrangement, tokenized open-ended funds recognized by the Hong Kong Securities and Futures Commission may conduct secondary market trading on licensed virtual asset trading platforms, and regulated services that retail investors can participate in will be further expanded. The Hong Kong Securities and Futures Commission also stated that it will consider allowing over-the-counter secondary market trading on a case-by-case basis.

As of the end of March this year, 13 tokenized products have already been offered to the public in Hong Kong. The total value of managed assets of the tokenized category shares has increased to approximately 7 times over the past year, reaching HKD 10.7 billion.

Therefore, in its announcement, the Hong Kong Securities and Futures Commission said: “Promoting 24/7 secondary market trading is timely. This can further promote the integration of tokenized products with the Web3 ecosystem by leveraging the potential use of regulated stablecoins and tokenized deposits in the relevant transactions.”

In addition, to address liquidity and investor protection issues in secondary market trading of tokenized open-ended funds—especially trading outside the normal trading hours of the relevant portfolio securities—the new measures take the operational arrangements applicable to exchange-traded funds and licensed virtual asset trading platforms regulated by the Hong Kong Securities and Futures Commission as references. The measures include fair pricing, orderly trading, liquidity provision, and information disclosure.

Liang Fengyi, Chief Executive Officer of the Hong Kong Securities and Futures Commission, said that in the process of building a digital asset ecosystem in Hong Kong, the new regulatory framework marks another important milestone. This comprehensive, all-round ecosystem will be both innovative and scalable, and will provide robust investor protection.

“New initiatives allow traditional securities products to be traded at night and on weekends after tokenization, and by promoting all-day-and-night liquidity through the use of regulated stablecoins and tokenized deposits, thereby meeting investors’ needs in an increasingly fast-changing and uncertain market environment,” said Liang Fengyi.

According to the announcement, the first batch of applicable products is expected to mainly be tokenized money market funds. The Hong Kong Securities and Futures Commission will, based on the operations of the relevant products, consider expanding the scope of products in due course. $BTC $ETH $RAVE