Hong Kong Watchdog to Issue Exchange Licensing Rules

The new rules, issued by the Hong Kong Securities and Futures Commission are based on the standards that are applied to licensed brokers
06 November 2019   178

The Hong Kong Securities and Futures Commission (SFC) has published rules governing "trading platforms for virtual assets." The regulator’s license will be able to get platforms where at least one security token is traded.

The new rules are based on the standards that SFC applies to licensed brokers. They cover asset retention, compliance with KYC / AML rules and the prevention of market manipulation.

The rules also include additional requirements to address specific risks associated with cryptocurrencies. SFC requires licensed platforms to offer services exclusively to professional investors and adhere to strict criteria for listing digital assets. Licensees will be placed in a regulated sandboxed SFC (sandbox) for the supervision period.

The regulator emphasized that he does not have the authority to license and control platforms on which exclusively cryptocurrencies without the properties of securities are traded.

SFC also warned investors about the risks associated with the purchase of futures for virtual assets. According to the regulator, trading in such derivatives is largely unregulated and subject to extreme volatility.

MAS May Allow BTC Derivatives to Approved Desks

The Singapore watchdog's initiative is related to interest in this type of assets of hedge funds and institutional investors
21 November 2019   87

Listing and turnover of cryptocurrency derivatives in Singapore may be allowed on regulated exchanges. This was stated by the country's Monetary Authority (MAS), writes Bloomberg.

The regulator's initiative is related to interest in this type of assets of hedge funds and institutional investors.

So far, according to the law of the country, payment tokens - these include bitcoin and ether - are not assets that can form the basis of regulated derivative financial instruments.

As reported, under the proposal, trading of derivatives on common cryptocurrencies such as Bitcoin and Ether will be subject to the Securities and Futures Act, the Monetary Authority of Singapore said Wednesday in a statement. The plans are in response to interest from hedge funds and asset managers that trade such products. 

Legal sites in Singapore include the Asia-Pacific Exchange, ICE Futures Singapore, the Singapore Derivative Exchange and the Singapore Stock Exchange.

The Central Bank hopes that this initiative will satisfy the need of large investors in managing their payment tokens under state control.

At the same time, MAS emphasized that derivatives of payment tokens are not a suitable financial instrument for retail investors due to high volatility.