On April 20, 2026, the Securities and Futures Commission ("SFC") launched a new regulatory framework to pilot secondary trading of tokenised SFC-authorised investment products in Hong Kong. The initiative aims to boost trading activity, broaden retail access, and enable 24/7 trading of tokenised open-ended funds on VATPs, with an initial focus on tokenised money market funds.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On April 20, 2026, the Securities and Futures Commission ("SFC") implemented a new regulatory framework to pilot secondary trading of tokenised SFC-authorised investment products in Hong Kong, with the objective of enhancing trading activity within the city’s growing digital asset ecosystem.
Regulatory Framework and Scope
Issued via a circular, the guidance primarily facilitates secondary trading of tokenised SFC-authorised open-ended funds on SFC-licensed virtual asset trading platforms ("VATPs") to broaden retail investor access. However, the SFC may consider over-the-counter secondary trading arrangements on a case-by-case basis.
Market Performance and Context
Following the SFC’s initial tokenisation-related regulatory framework set out in late 2023, product issuers have shown keen interest in tokenisation opportunities. As of March 2026, 13 tokenised products were offered to the public in Hong Kong, with assets under management of their tokenised classes increasing approximately seven-fold to $10.7 billion over the past year.
Trading Mechanics and Safeguards
The pilot enables 24/7 secondary trading to integrate tokenised products with the Web3 ecosystem through regulated stablecoins and tokenised deposits. New measures address liquidity and investor protection issues, particularly regarding trading beyond regular trading hours of underlying securities, covering fair pricing, orderly trading, liquidity provision, and disclosure.
Executive Statement
Ms Julia Leung, the SFC’s Chief Executive Officer, stated that the new framework marks a major milestone for Hong Kong’s integrated, innovative, and scalable digital asset ecosystem with robust investor safeguards. She noted that tokenised traditional securities can be traded in the evening and on weekends, supported by regulated stablecoins and tokenised deposits to facilitate round-the-clock liquidity for investors reacting to a fast-moving market environment.
Implementation and Compliance
The initial batch of products is expected to focus on tokenised money market funds. The SFC will review their operation and consider expanding the product scope in due course. Product issuers and intermediaries, including SFC-licensed VATPs, are encouraged to consult or notify the SFC beforehand on endeavours related to this regulatory framework.
Regulatory References and Definitions
The SFC established the regulatory frameworks for tokenised products and tokenised securities-related activities by issuing two circulars on 2 November 2023: Circular on tokenisation of SFC-authorised investment products and Circular on intermediaries engaging in tokenised securities-related activities. Regulated stablecoins refer to fiat-referenced stablecoins the issue of which is authorised by a licence granted under the Stablecoins Ordinance.
Page last updated 20 Apr 2026
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