The Hong Kong Securities and Futures Commission (SFC) announced that the upcoming guidelines for operators of virtual asset trading platforms will place investor protection at the forefront. Julia Leung, Chief Executive of the SFC, made these remarks on May 30 during an online seminar in the Distinguished Leaders Series hosted by the Hong Kong Institute of Finance.
Back in 2018, when the SFC first proposed regulatory measures for virtual asset trading platforms, it faced criticism from parts of the fintech sector. Critics claimed that the licensing system – requiring applicants to meet standards related to internal controls and investor protection – could drive financial technology companies to operate in other regions like Singapore. However, Julia Leung noted that the importance of these requirements became clear to the market after several overseas virtual asset platforms went bankrupt.
The guidelines for virtual asset trading platform operators in Hong Kong will take effect starting in June. Julia Leung believes these guidelines align with market expectations and that prioritizing investor protection is the right course of action. The guidelines will include measures on the prudent custody of assets, the separation of client assets, and avoiding conflicts of interest.
Julia Leung expressed her satisfaction with the SFC’s leadership in regulatory practices, saying, “We are pleased to see the SFC leading as a regulatory role model.”
The SFC’s new regulations underscore the importance of investor protection in an increasingly digital financial landscape and reflect a growing trend of financial regulators worldwide prioritizing investor safeguards in their approach to the fast-evolving cryptocurrency industry.
Source: https://blockchain.news/news/Hong-Kong-SFC-Chief-Executive-New-Guidelines-for-Crypto-Trading-Platforms-Prioritize-Investor-Protection-9bd33837-7888-4aa3-8635-c7c0fd651734