• News
    • Stocks
    • Banks and Finance
    • Companies
    • Crypto
    • Forex
  • Videos
  • Articles
    • Forex CRM
    • Crypto Payments
    • Trading
    • Crypto Exchange Business
    • Forex Business
    • Fintech
    • Liquidity
    • FinTech Awards
  • Liquidity Providers List
  • Crypto Payment Providers

Dark Theme

Hong Kong Regulators Impose Limits on Investing in Spot Crypto ETFs

Jan 30, 2022

Hong Kong Regulators Impose Limits on Investing in Spot Crypto ETFs

Hong Kong's regulatory institutions have issued new guidelines for intermediaries wanting to provide virtual asset-linked securities, such as exchange-traded funds (ETFs). The proposed regulations target items such as spot ETFs, which follow the present value of assets like Bitcoin and allow for quick sale and purchase.

The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) found that spot markets for digital assets are totally unregulated at the moment, so they are likely to introduce problems for shareholder protection, varying from a lack of price transparency to growing market manipulation, according to a report published on Friday.

According to the paper, the HKMA and SFC are giving the new guidelines in response to "a growing amount of requests" from services engaged in supplying digital asset-backed solutions to their clients.

Virtual asset-linked securities have grown in popularity, especially after US authorities permitted the first bitcoin futures ETF in October. The fund reached over $1 billion in volume on its first sessions. However, the United States has yet to authorize a spot bitcoin ETF. The Securities and Exchange Commission (SEC) of the United States denied a request for a spot ETF on Thursday, soon after blocking another plan.

Meanwhile, other nations, such as Canada, Germany, Switzerland, and Brazil, have expressed support for spot ETFs.

According to the circular, Hong Kong's new laws are intended to safeguard shareholders by restricting the selling of spot commodities to large investors. Another rule is that service providers assess their customers' understanding of digital securities.

For derivatives-based items, the requirements are less stringent. The circular added that, although futures-based exchange-traded securities relating to digital assets would still be classified as complex financial assets, the "large investors only" limitation does not extend to them.

"Trading in digital asset futures contracts on a defined exchange that is a licensed futures market is controlled by conventional regulations. Price transparency and possible price manipulations may be less of a worry," the document said, adding that it also relates to futures Exchange-traded funds.

The current recommendation further emphasizes that access to non-derivative ETF securities provided outside of the United States should be limited to professional investors only. Hong Kong authorities believe the dangers of these "complex" exchange-traded instruments are "not reasonably expected to be grasped by a typical shareholder."

"To deliver proper shareholder safety, the SFC and the HKMA believe it is reasonable and essential to require middlemen to engage solely with SFC-regulated digital asset exchanges," the document.

The SFC and the HKMA have granted digital asset exchanges a six-month transition time to adjust their infrastructures and procedures to comply with the new standards. Intermediaries that are not presently engaged in digital asset-related operations should verify that they can comply with the standards in the guidance before providing similar services.

Subscribe Our Newsletter

Stock Market News Live Updates: S&P 500 Closes At All-Time High Jump-Starting The Santa Claus Rally
Stock Market News Live Updates: S&P 500 Closes At All-Time High Jump-Starting The Santa Claus Rally

The index surpassed its previous high for the second trading day in a row, as markets surged ahead of the last week of the year. All three main US indices rose, signaling equity market bulls that the Santa Claus Rally continues.

Stocks
Energy And Commodity Hedge Funds Post Big Gains As Prices Skyrocket
Energy And Commodity Hedge Funds Post Big Gains As Prices Skyrocket

As the globe faced an energy shortage, hedge funds that bet on a major recovery for commodities saw their gains rocket in the first nine months of 2021.

Stocks
Liquidity Provider

ETF liquidity: Looking for a Trustworthy Provider
Let's find out what are ETF funds and investment instruments, who are ETF Liquidity Providers and what are key criteria of a reliable ETF Liquidity Provider.

discover
What is a Crypto Payment Gateway?

Oliver

What is a Crypto Payment Gateway?

Modern blockchain technology is about to transform major industries such as healthcare, retail, supply chains, and many more. Most importantly, it is quickly gaining traction in payment methods.

Crypto Payments

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries b2broker

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Alexander

    Full Bitcoin Price History: From 2009 to 2022

    https://liquidity-provider.com/app/uploads/2023/01/cover-11-300x203.png

    Constantine

    Top 5 Most Reliable KYC Technology Providers

    https://liquidity-provider.com/app/uploads/2023/01/cover-10-300x203.png

    Alexander

    The Best Crypto Wallets of 2022: Top 5 Picks

    https://liquidity-provider.com/app/uploads/2023/01/cover-2-300x203.png

    Alexander

    Top 5 Most Reliable Forex Brokers of 2022

    https://liquidity-provider.com/app/uploads/2023/01/cover-1-300x203.png

    Constantine

    5 Top-Tier Breakthrough Trading, Crypto and Fintech Industries Software Solutions in 2022

    https://liquidity-provider.com/app/uploads/2023/01/cover-300x203.png

    Constantine

    5 Most Successful FinTech Industry Startups in 2022

    https://liquidity-provider.com/app/uploads/2022/12/cover-300x203.png

    Constantine

    Top 7 Liquidity Providers of 2022

    https://liquidity-provider.com/app/uploads/2022/12/liquidity-provider-3-300x203.png

    Alexander

    Top 5 Crypto Exchanges of 2022

    https://liquidity-provider.com/app/uploads/2022/12/liquidity-provider-1-300x203.png

    Constantine

    Top 5 Most Distinguished White Label Solutions in 2022

    https://liquidity-provider.com/app/uploads/2022/12/liquidity-provider-2-300x203.png

    Constantine

    What is Crypto Leverage Trading And How Does It Work?

    https://liquidity-provider.com/app/uploads/2022/12/oblozhka-5-300x203.png

    Constantine

    Top 5 Most Prospective Tokens in the Metaverse.

    https://liquidity-provider.com/app/uploads/2022/12/cover-7-300x203.png

    Constantine

    How to Mine Bitcoins? – Beginners Guide

    https://liquidity-provider.com/app/uploads/2022/11/cover-5-300x203.png

    Oliver

    Blockchain for Business. Pros & Cons

    https://liquidity-provider.com/app/uploads/2022/11/oblozhka-1-300x203.png

    Constantine

    The Future of Stablecoins and Central Bank Digital Currencies (CBDCs)

    https://liquidity-provider.com/app/uploads/2022/11/cover-3-300x203.png

    Alexander

    What is Web 3.0 and Why Does it Matter?

    https://liquidity-provider.com/app/uploads/2022/11/cover-1-300x203.png

    Constantine

    5 Benefits of Accepting Crypto Payments for Your Business

    https://liquidity-provider.com/app/uploads/2022/11/cover-300x203.png

    Constantine

    Hot Wallet vs Cold Wallet: Which Do I Need More for Crypto?

    https://liquidity-provider.com/app/uploads/2022/11/oblozhka-5-300x203.png

    Alexander

    What is Hedging and How Does it Work in Trading? — Ultimate Guide

    https://liquidity-provider.com/app/uploads/2022/10/oblozhka-4-300x203.png

    Oliver

    Pre-execution vs Post-execution: What’s the Difference?

    https://liquidity-provider.com/app/uploads/2022/10/oblozhka-1-300x203.png

    Constantine

    What is Slippage in Trading? – Definition

    https://liquidity-provider.com/app/uploads/2022/10/shapka-1-1-300x203.png

    Oliver

    How Forex Brokers Make Money? – A-Book vs. B-Book Model

    https://liquidity-provider.com/app/uploads/2022/10/shapka-2-300x203.png

    Oliver

    What is the Ethereum Merge, And How Will it Change Ethereum?

    https://liquidity-provider.com/app/uploads/2022/10/shapka-1-300x203.png

    Alexander

    How to Spot Cryptocurrency Scams

    https://liquidity-provider.com/app/uploads/2022/10/shapka-300x203.png

    Milena

    Exploring the Metaverse: What Does It Mean for the Future of the Internet?

    https://liquidity-provider.com/app/uploads/2022/10/oblozhka-300x203.png
    • News
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
    • Articles
      • Forex CRM
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
    [email protected]

    © 2023 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy