Hong Kong Mulls Spot Crypto ETFs for Retail Investors

Hong Kong's securities regulator, the Securities and Futures Commission (SFC), is moving towards allowing retail investors to buy spot crypto Exchange Traded Funds (ETFs).

"We welcome proposals using innovative technology that boosts efficiency and customer experience," said SFC Chief Executive Officer Julia Leung. "We're happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset."

Hong Kong regulators are continuing to take a progressive approach to crypto, and their opinion on retail exposure to digital assets has shifted throughout the year.

In January, the SFC tightened regulations by restricting retail investors from accessing crypto spot ETFs, limiting them to professional investors with portfolios of at least 8 million HKD ($1 Million). Then, in October, the SFC updated its rule book to allow a broader range of investors to engage in spot-crypto and ETF investing, stipulating that they pass a knowledge test and meet net worth – though less than the professional investor threshold – requirements.

"The policy is updated in light of the latest market developments and enquiries from the industry seeking to further expand retail access through intermediaries and to allow investors to directly deposit and withdraw virtual assets to/from intermediaries with appropriate safeguards," the SFC said in a circular.

Issuers of listed crypto products would need to publish risk disclosure statements.

"As the crypto ecosystem evolves step-by-step to the point where we're comfortable, then we're happy to open up more access to the wider investing public," said Leung.

(Source: CoinDesk)