SFC’s Julia Leung Gives Update on Hong Kong Crypto Regulation

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In her keynote address at Hong Kong’s FinTech Week, “Fintech: Metamorphosis of the financial industry”,1 Ms. Julia Leung provided a welcome update on Hong Kong’s regulatory approach to Fintech and the SFC’s latest thinking on Hong Kong crypto regulation. Ms. Leung, the Hong Kong SFC’s Deputy Chief Executive Officer and Executive Director (Intermediaries), noted the accelerated use of technology in the financial industry, particularly the role of online platforms in selling investment products, and commented on the benefits of technological advances for consumers in terms of lower fees and greater efficiency. Turning to the paradigm shift in financial services resulting from developments in the crypto (i.e. virtual asset) industry, Ms. Leung explained how the SFC has adopted a light touch regulatory approach to facilitate the industry’s development while protecting investors.

Noting the rapid evolution of crypto-related activities as they edge towards mainstream finance, Ms. Leung explained that the SFC is currently reviewing its regulatory initiatives of the past few years to assess whether they remain fit for purpose. The SFC is considering whether retail investors should be allowed access to crypto exchange-traded funds (ETFs) through online brokers, and if so, whether the SFC should impose additional knowledge requirements or risk disclosures.

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