Joint Circular between the Hong Kong Securities and Futures Commission and the Hong Kong Monetary Authority: Allow intermediaries to provide virtual asset pledge services

PANews reported on October 8 that the Hong Kong Securities and Futures Commission and the Hong Kong Monetary Authority jointly issued the "Supplementary Joint Circular on Intermediaries' Virtual Asset-Related Activities" on September 30 to update the licensing or registration conditions for intermediaries. In terms of background, the two bureaus have optimized and relaxed some regulations based on market development and industry opinions, and will subsequently issue guidelines on activities involving designated stablecoins. In terms of content, first, intermediaries are allowed to provide pledge services to their customers, and they need to operate through independent accounts such as licensed platforms and disclose risks; second, licensed corporations and registered institutions can provide off-platform trading services through licensed platforms; third, it is clear that customers who use virtual assets to subscribe and redeem investment products, or subscribe or redeem virtual asset funds in kind, will not be regarded as providing virtual asset trading services. Intermediaries need to notify in advance, hold virtual assets in compliance and comply with anti-money laundering regulations; fourth, clarify the requirement that intermediaries ensure that clients have sufficient net assets, and that intermediaries should make risk disclosure statements to clients specifically regarding virtual asset futures contracts. This does not apply to clients who are institutional professional investors and qualified corporate professional investors.
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