Reed Smith In-depth

Thursday 1 June 2023 marks the start of a brand-new regulatory regime for virtual assets trading platforms (VATPs) in Hong Kong. Reed Smith is working with a number of platforms seeking to obtain licences under the new regulatory regime. In our experience, it is important for an applicant to appreciate that VATPs will be highly regulated in Hong Kong and will need to comply with strict rules regarding management fitness and competency, governance and internal control, virtual asset (VA) admissions and custody, market surveillance and reporting.

In this note, we provide a summary of the regulators’ latest clarifications and answer the five practical questions often asked by exchanges seeking a licence in Hong Kong.


The Guidelines: The final piece of the framework

On 25 May 2023, the Securities and Futures Commission (SFC) published the Guidelines for Virtual Asset Trading Platform Operators (the Guidelines). These reflect extensive consultation with industry players1 and provide the final piece of the regulatory framework by giving some much-awaited answers on certain key issues:

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