Hong Kong launches regulatory framework for secondary trading of tokenised products

Hong Kong's Securities ​and Futures Commission (SFC) launched a ​regulatory framework on Monday for ‌piloting ​the trading of eligible tokenised investment products in the city, a statement showed. * ‌The framework will mainly facilitate secondary trading of SFC-authorised open-ended funds on SFC-licensed virtual asset trading platforms, and will broaden retail investors' ‌access to regulated trading services, the regulator said.

* The move ‌builds on the SFC's tokenisation scheme introduced in November 2023 and aims to boost digital asset trading activity in Hong Kong, the SFC said. * New ⁠framework ​measures tackle ⁠issues such as investor protection and trading beyond regular trading hours of the underlying ⁠securities.

* "This initiative allows a traditional securities product, once tokenised, to be ​traded in the evening and on weekends, and supported by ⁠the use of regulated stablecoins and tokenised deposits to facilitate round-the-clock liquidity, satisfying demand ⁠of ​investors reacting to an increasingly fast-moving and uncertain market environment," said Julia Leung, the SFC’s chief executive officer. * The ⁠initial batch of products traded under the framework is expected to ⁠focus on ⁠tokenised money market funds. The regulator may widen the scope of the product after reviewing trading operations.