SFC Restricts Retail Investors to Highly Liquid Digital Assets

  • Julia Leung Fing-yee announced that the SFC has decided to restrict retail investors to highly liquid digital assets.
  • She was reluctant to give specifications on the digital assets but stressed that the investors would be allowed to trade only the major virtual assets.
  • Leung also added the city’s focus on transferring itself into a virtual asset hub.

Reportedly, Hong Kong’s financial regulator, the Securities and Futures Commission (SFC) has decided to restrict retail traders to “highly liquid” digital assets after the new licensing regime for virtual asset service providers (VASPs) is put into effect in June.

Last year, the legislative council of Hong Kong announced that the city has taken initiative to establish a new licensing regime for VASPs, which is supposed to start functioning from June.

Notably, the newly appointed CEO of the SFC, Julia Leung Fung-yee, at the recent Asia Financial Forum, told that the new criteria would allow retail investors to only trade in major virtual assets. She stated:

Some virtual assets platforms have over 2,000 products, but we do not plan to allow retail investors to trade in all of them. We will set the criteria that would allow retail investors to trade in major virtual assets.

Further, while answering the inquiries on the specifications of the virtual assets, Leung didn’t provide any specific details; instead, she told that the assets with “deep liquidity” would be considered. However, Leung had been reluctant to recite a word other than reiterating “highly liquid”, when questions arose on the access to Bitcoin and Ether.

In addition, Leung cited the legislation’s enthusiasm for transforming Hong Kong into a virtual asset hub:

We aim to have a proper regulatory framework to safeguard the interest of all investors and to enhance Hong Kong as a virtual asset hub.

Moreover, Leung added that proper regulation could restrict and rescue Hong Kong from crypto vulnerabilities, like the fall of the crypto exchange FTX.

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Source: https://coinedition.com/sfc-restricts-retail-investors-to-highly-liquid-digital-assets/