The securities regulator in Hong Kong has concluded its consultation on the regulations governing digital asset platforms, paving the way for authorized organizations to offer their services to retail investors.
The Securities and Futures Commission (SFC) announced on Monday that it will put in place a variety of safeguards to “protect” small-scale investors, such as assessment tokens before they are published on exchanges.
This comes after a period of consultation with key players in the business that was held in February and gave them the option to offer advice on a range of topics, including permitting smaller investors to trade cryptocurrency.
The SFC reported that throughout that time, it received 152 written comments from interested parties who “generally welcomed the proposed requirements.” Due to this, the regulatory body changed its mind regarding the limits put in place last year and now permits licensed virtual asset providers to serve retail crypto investors.
Smaller investors will have to clear many hurdles before the measures go into effect on June 1, including investor education and exposure risk awareness.
The SFC stated it would not disclose a list of verified assets deemed safe for retail investors in its consultation conclusion on new regulatory criteria. “Platform operators are, however, informed of their duties and advised to take appropriate precautions under the applicable laws to verify that retail trading of any token they make accessible will not violate the public offering regimes in Hong Kong.”
The SFC stated in a statement that other preventive measures would include good governance, strengthened onboarding procedures, disclosures, and admission requirements.
Despite market instability and skepticism regarding the digital asset market, Hong Kong’s top financial official claimed just a month ago that the moment was right for the economy to speed up the implementation of Web3 technology.
The chief executive officer of the SFC, Julia Leung, stated in the release, “Providing clear standards for regulation is essential to encouraging sustainable development.”
Hong Kong issued regulations in May indicating that local exchanges needed licenses and could only serve professional investors. Changes coming up next month would virtually undo that policy.
