THELOGICALINDIAN - The Securities and Futures Commission of Hong Kong has appear new affairs to adapt the cryptocurrency industry The regulator issued two circulars on Thursday analogue new rules for crypto exchanges as able-bodied as crypto asset portfolio managers intermediaries and armamentarium distributors
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New Regulatory Approach
The Hong Kong Securities and Futures Agency (SFC) issued two circulars on Thursday apropos cryptocurrency regulations. The aboriginal outlines “a new access which aims to accompany basic asset portfolio managers and distributors of basic asset funds beneath its authoritative net,” the agency wrote. It additionally “sets out a conceptual framework for the abeyant adjustment of basic asset trading platforms.” The additional certificate addresses intermediaries that administer crypto funds.
The SFC defines a basic asset as “a agenda representation of value, which is additionally accepted as ‘cryptocurrency’, ‘crypto-asset’ or ‘digital token’.”
Citing “significant risks basic assets affectation to investors,” the agency appear that it will “adopt new measures aural its authoritative remit,” elaborating:
In addition, the regulator acclaimed that it will analyze whether crypto exchanges “are acceptable for adjustment in the SFC authoritative sandbox.”
Risks Under Existing Law
In the aboriginal document, the balance babysitter bidding affair over “the growing broker absorption in accepting acknowledgment to basic assets via funds and actionable trading belvedere operators in Hong Kong.” The SFC explained that investors are not adequate back the Balance and Futures Ordinance (SFO) currently does not administer to able exchanges or portfolio managers, adding:
The regulator proceeded to outline the “significant risks” associated with advance in crypto assets which it has articular such as volatility, liquidity, cybersecurity, safe aegis of assets, bazaar integrity, money laundering, agitator financing, battle of absorption and fraud.
Licenses and Regulatory Sandbox
Under the new rules, crypto asset portfolio managers will be accountable to the SFC’s administration “irrespective of whether the crypto assets accommodated the analogue of balance or futures contracts.”
Noting that firms which administer funds that advance in crypto assets in Hong Kong will charge to be licensed, the agency detailed:
The SFC will again appraise whether the close is able of affair the accepted authoritative standards. If the close does not accede with the proposed agreement and conditions, its licensing appliance will be rejected. Licensed corporations declining to accede will be appropriate to disentangle their crypto portfolios aural a reasonable aeon of time.
“If the SFC grants a licence to a able belvedere operator, it will appoint adapted licensing altitude and the abettor will advance to the abutting date of the sandbox,” the regulator described. “This would about beggarly added common reporting, ecology and reviews,” the agency added, stating:
Crypto Asset Funds
The additional annular addresses both accustomed and crooked intermediaries that administer crypto funds. They are appropriate to accede with the SFC’s Code of Conduct. “Specifically, intermediaries should ensure that the advocacy or address fabricated is acceptable for audience in all circumstances,” the regulator emphasized.
Intermediaries should additionally accommodate their audience with all the all-important advice to accomplish abreast advance decisions “in a bright and calmly apprehensible manner.” Furthermore, the SFC explained that they charge conduct due activity on the armamentarium manager, the armamentarium itself, and the fund’s counterparties, noting:
What do you anticipate of the SFC’s new rules to adapt the crypto industry in Hong Kong? Let us apperceive in the comments area below.
Images address of Shutterstock and Hong Kong SFC.
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