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The Securities and Futures Commission (SFC) in Hong Kong has issued guidelines regarding the requirements for tokenized securities and other investment products. The guidelines, which were released on November 2, include notable details. The Hong Kong government continues to take steps in the cryptocurrency market and successfully attracts the attention of companies operating in this field.
Noteworthy Guidelines from SFC
The demand for tokenized investment products and the various benefits of blockchain technology have become the focus of attention in Hong Kong. As a result, the SFC has taken a step towards publishing guidelines regarding the tokenization of securities and futures markets.
The guidelines address four aspects for compliance with regards to activities related to tokenized securities. These aspects include tokenization regulations, project descriptions, brokerage firms, and personnel competence. Additionally, these four aspects provide a detailed explanation of the 12 main points addressed.
The main objective of tokenizing licensed investment products, as stated by the SFC, is attributed to the increasing market demand in the industry and the government’s desire to facilitate market development. The SFC considered that this product could meet all the applicable product authorization requirements and address the associated risks. The following statement was included in the announcement:
“SFC believes that allowing primary transactions of tokenized SFC-approved investment products with a transparent approach is appropriate.”
Hong Kong Citizens Losing Interest in the Crypto Sector
Regarding project requirements, product providers involved in the project will need to clearly state whether settlements occur off-chain or on-chain and always provide proof of token ownership. Lastly, the SFC will also require providers to have at least one qualified personnel with relevant experience and expertise to operate or supervise tokenization regulations and effectively manage new risks related to ownership.
Despite the many steps and progress made by the Hong Kong government in the cryptocurrency market, citizens of the country continue to lose interest in the crypto market.
According to a survey conducted by the Hong Kong University of Science and Technology’s business school, the high-profile JPEX scandal, involving a $166 million loss, has negatively affected investors’ desire to invest in cryptocurrencies. 41% of the 5,700 participants in the survey expressed no interest in owning crypto assets.
