The Securities and Futures Commission (SFC) of Hong Kong recently issued the conclusions of its consultation regarding the regulatory requirements for platforms engaged in trading virtual assets. The respective requirements were proposed for the regulation of the entities offering services related to trading virtual assets.
Hong Kong’s SFC Completes Discussion Regarding the Regulation of Platforms Trading Digital Assets
During the period of consultation, SFC collected up to 152 submissions credited to professional associations, expert consultancy platforms, and so on. In addition to this, the proposing entities also include registered corporations and other individuals as well as stakeholders. Respondents commended the proposed requirements. Nonetheless, several among them also asked for relevant clarifications on them.
In the case of the broad-ranging suggestions and remarks offered by respondents, the regulatory agency has clarified or modified a few of the respective requirements. A great number of respondents consented to play the role of retail investors. The regulator is going to implement several resilient and adequate measures for the protection of the investors. In this way, they will ensure appropriateness concerning the onboarding procedure.
Apart from that, they will also offer improved due diligence, good governance, disclosures, as well as admission criteria. The provision of transparent regulatory expectations is considered to be the chief thing to enhance accountable development, as stated by Ms. Julia Leung (the CEO of the SFC). She added that the thorough regulatory agenda of Hong Kong for virtual assets operates to back innovation and sustainability within the industry.
The Guidelines dealing with Virtual Asset Trading Platform Operators will be implemented on the 1st of June this year. The respective guidelines focus on avoiding conflicts, distinguishing user assets, as well as the secure custody of virtual assets among other things. The regulatory organization will offer more guidance regarding the latest regulatory requirements in addition to additional information concerning transitional arrangements.
The Platform Unwilling to Comply with the Standards of the Agency Require Closing Their Business in Hong Kong
Interested companies dealing with the trading of digital assets can apply under the SFC to get a license while agreeing to comply with the agency’s standards. On the other hand, those having no plan in this respect have to stop their operations and businesses within the jurisdiction of Hong Kong. The regulator will keep on making endeavors related to the Investor and Financial Education Council for cautioning investors about the risks related to trading on unregistered companies.
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