Alisa Davidson
Printed: February 19, 2025 at 8:01 am Up to date: February 19, 2025 at 8:02 am
Edited and fact-checked:
February 19, 2025 at 8:01 am
In Temporary
Hong Kong SFC has launched the “ASPIRe” roadmap, outlining 12 initiatives geared toward streamlining market entry, establishing compliance and product frameworks, and upgrading infrastructure.
Hong Kong Securities and Futures Fee (SFC) introduced the discharge of its new “ASPIRe” roadmap, which outlines 12 key initiatives geared toward streamlining market entry, creating adaptive compliance and product frameworks, and upgrading infrastructure to mix the reliability of conventional finance (TradFi) with the effectivity of blockchain expertise. This method highlights Hong Kong’s strategic efforts to ascertain itself as a trusted hub for digital asset liquidity.
Pillar A, titled “Entry,” focuses on constructing an inclusive ecosystem by aligning regulatory requirements with international participation. The SFC goals to draw certified members, broaden investor choices, and combine Hong Kong extra deeply with international liquidity. The important thing objectives of Pillar A embody increasing market entry by growing clear licensing frameworks for compliant Digital Asset Service Suppliers (VASPs) to enter the market simply, encouraging accountable participation by creating clear pathways for a variety of stakeholders, together with international platforms and liquidity suppliers, and enhancing investor alternatives by broadening entry to regulated providers to enhance market effectivity, value discovery, and innovation.
Over-the-counter (OTC) stays an important technique for executing large-volume transactions, permitting patrons and sellers to conduct block trades with out impacting market costs. The SFC plans to help the HKSAR Authorities’s introduction of a devoted licensing framework for OTC buying and selling to handle present gaps within the present regulatory regime. Consultations with stakeholders have emphasised the important function of OTC desks in offering liquidity and facilitating institutional participation. By making use of the “similar enterprise, similar dangers, similar guidelines” precept, the SFC will be certain that OTC operators are topic to the identical regulatory necessities as Digital Asset Buying and selling Platforms (VATPs), fostering honest competitors whereas mitigating dangers like cash laundering and market manipulation.
As well as, the SFC is engaged on establishing a licensing framework for custodians, recognizing their essential function in safeguarding consumer belongings. This framework will introduce a two-tier market construction that separates buying and selling and custody features. The brand new regime will align with the requirements utilized to conventional monetary custodians, overlaying areas like capital adequacy, cybersecurity, and asset segregation. Legislative preparations, led by the HKSAR Authorities with enter from regulators, are anticipated to be accomplished by the top of 2025.
On condition that digital asset buying and selling is inherently borderless and liquidity is dispersed throughout numerous international liquidity swimming pools, the SFC encourages main worldwide digital asset platforms to arrange operations in Hong Kong. This can enable them to leverage their international order books whereas adhering to native compliance requirements. Such integration will present native buyers with entry to international markets and appeal to institutional liquidity to Hong Kong, additional growing a deeper and extra liquid market.
ASPIRe: Strengthening Safety, Competitiveness, And Market Entry For Digital Belongings In Hong Kong
Pillar S, representing Safeguards, is designed to foster a safe and aggressive digital asset ecosystem by aligning compliance requirements with international greatest practices. This method balances regulatory rigor with market competitiveness, guaranteeing that necessities are each versatile and outcome-driven. By offering clear tips and proportional oversight, Pillar S goals to boost investor safety whereas supporting sustainable business development.
The framework prioritizes aligning compliance necessities with core regulatory targets similar to asset safety and market integrity whereas nonetheless permitting market members the flexibleness to implement progressive applied sciences and operational controls. It adopts a risk-proportionate oversight mannequin, tailoring compliance obligations to the particular threat profiles of various market members. This ensures systemic stability whereas avoiding pointless restrictions on innovation. Moreover, it promotes regulatory readability by integrating digital asset compliance with conventional monetary frameworks, decreasing uncertainty and minimizing operational inefficiencies. By these measures, the SFC goals to create a regulatory atmosphere that protects buyers whereas encouraging accountable development within the digital asset sector.
Pillar P is centered on broadening the provision of digital asset services and products inside Hong Kong’s regulated market, guaranteeing they’re tailor-made to satisfy the various wants of various investor teams. The SFC goals to introduce funding instruments that align with buyers’ threat tolerance and expertise ranges, selling market growth whereas sustaining safeguards to guard retail members. This balanced regulatory method encourages innovation whereas minimizing potential dangers.
A key focus of this initiative is to facilitate the introduction of extra subtle funding merchandise that cater to buyers with totally different ranges of experience. On the similar time, robust protecting measures will probably be put in place to make sure that retail buyers usually are not uncovered to dangers they might not totally perceive. Moreover, the framework will incorporate complete methods to mitigate potential dangers similar to fraud, conflicts of curiosity, and market manipulation. By implementing these safeguards, Pillar P seeks to help a dynamic but safe funding atmosphere that fosters accountable participation within the digital asset sector.
ASPIRe: Strengthening SFC Oversight Of Digital Asset Market And Empowering Stakeholders By Clear, Truth-Based mostly Info Sharing
Pillar I focuses on enhancing the SFC means to supervise the digital asset market by leveraging superior expertise and growing dependable infrastructure. The aim is to strengthen cross-agency collaboration and set up a complete framework for monitoring and detecting dangers, misconduct, and illicit actions inside the area.
A key facet of this initiative is enhancing market-wide surveillance by growing visibility throughout VASPs and figuring out potential dangers and irregularities. By investing in cutting-edge knowledge analytics and early warning programs, the SFC goals to detect illicit actions at an early stage, permitting for proactive intervention. Moreover, investor safety stays a precedence, with measures designed to safeguard belongings each earlier than and after any potential incidents. By a mix of technology-driven oversight and collaborative regulatory efforts, Pillar I seeks to create a safer and clear digital asset ecosystem.
Pillar Re is designed to empower each buyers and business members by selling clear, fact-based info sharing. The aim is to equip the general public with the mandatory data to navigate the complexities and dangers of digital belongings, fostering a well-informed group able to partaking responsibly with the evolving market. Moreover, by guaranteeing that business stakeholders have a transparent understanding of regulatory developments, the SFC goals to create a collaborative atmosphere the place companies can contribute constructively to shaping insurance policies.
A core goal of this initiative is enhancing investor consciousness, guaranteeing that retail members totally comprehend the options and dangers related to digital belongings earlier than making funding selections. Concurrently, business engagement is inspired, permitting stakeholders to supply insights that assist refine regulatory frameworks. Transparency in policymaking stays a precedence, guaranteeing that rules are each accessible and aligned with market wants whereas attaining meant regulatory outcomes.
The SFC’s Regulatory Roadmap displays a forward-thinking method to addressing the challenges of the digital asset market. Success would require a balanced effort from all members—regulators should fastidiously handle innovation whereas sustaining market integrity, establishments should prioritize long-term stability over short-term hypothesis, and retail buyers should method the house with knowledgeable warning.
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About The Creator
Alisa, a devoted journalist on the MPost, focuses on cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a eager eye for rising tendencies and applied sciences, she delivers complete protection to tell and have interaction readers within the ever-evolving panorama of digital finance.
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Alisa Davidson
Alisa, a devoted journalist on the MPost, focuses on cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a eager eye for rising tendencies and applied sciences, she delivers complete protection to tell and have interaction readers within the ever-evolving panorama of digital finance.
Extra articles
