Hong Kong Securities and Futures Commission: Licensed virtual asset trading platforms allowed to share listing with affiliated overseas platforms

On November 3, the Securities and Futures Commission of Hong Kong (SFC) issued two new circulars, outlining the expected standards for licensed virtual asset trading platform operators in Hong Kong. This is a significant step towards facilitating their access to global liquidity and expanding the range of products and services they offer. One circular states that the SFC allows platform operators to merge trading instructions with affiliated overseas virtual asset trading platforms into a shared order book, which is a key component of the ASPIRe roadmap under the A (Access) pillar, aimed at attracting global platforms, trading flow, and liquidity providers. Through seamless cross-platform order matching and execution, Hong Kong investors can benefit from improved market liquidity and more competitive pricing, while also reducing additional risks under robust safeguards. The SFC will explore the feasibility of allowing licensed brokers to route client orders to regulated overseas liquidity pools within the same group, and then consider further expanding such arrangements. To enhance the P (Products) pillar of the roadmap, which aims to expand new products and services, the SFC allows platform operators in another circular to offer virtual assets without a 12-month track record to professional investors, stablecoins licensed by the Hong Kong Monetary Authority, and tokenized securities and related investment products. Additionally, entities associated with platform operators can provide custody services for virtual assets or tokenized securities not traded on the platform. Ms. Ashley Alder, the CEO of the SFC, stated, "Expanding market liquidity and commercial products and services consistently is key to driving the continuous development of Hong Kong's digital asset ecosystem. Today's step in connecting global liquidity marks a significant milestone in our commitment to striking the right balance between promoting market innovation vitality and upholding high standards for investor protection and market integrity."