On September 30, 2025, the Securities and Futures Commission ("SFC") and the Hong Kong Monetary Authority ("HKMA") issued updates to licensing and registration conditions for intermediaries involved in virtual asset dealing, advisory, and asset management services. The changes aim to promote market growth while safeguarding investor protection. The Joint Circular sets out revised requirements, including guidance on staking services, off-platform trading, and investment products with virtual asset exposure. Additionally, intermediaries were reminded to notify the SFC and HKMA of any material changes to their activities, adhering to specific disclosures and risk management practices.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On September 30, 2025, a supplemental circular was issued by the Securities and Futures Commission ("SFC") and the Hong Kong Monetary Authority ("HKMA") on 22 December 2023, updating relevant licensing or registration conditions and terms and conditions for intermediaries.
The SFC and the HKMA jointly released updated requirements for intermediaries involved in virtual asset dealing services, advisory services, and asset management. These changes were introduced based on a review of the Joint Circular, incorporating feedback from the industry and recent market developments.
The updates aim to promote market development while ensuring investor protection. For activities involving specified stablecoins issued by HKMA-licensed issuers, further guidance is expected in the near future. Corresponding updates have been made to the licensing and registration conditions, with tracked changes appended in Appendix A and B.
The Joint Circular sets out the requirements for intermediaries engaging in certain virtual asset dealing services, advisory services, asset management services, and/or distribution of investment products with exposure to virtual assets. The SFC and the HKMA have reviewed these requirements in light of the latest market developments and industry feedback.
As a result of the review, refinements and relaxations to the requirements have been introduced to facilitate market development while maintaining strong investor protection measures.
Further guidance will be provided for activities involving specified stablecoins issued by an issuer licensed by the HKMA under the Stablecoins Ordinance (Cap.656).
On September 30, 2025, the SFC and the HKMA issued requirements and guidance on staking for intermediaries, allowing them to provide staking services to clients through segregated accounts maintained with an SFC-licensed platform or an authorized financial institution, while adhering to disclosure and risk requirements.
Licensed corporations and registered institutions are now allowed to execute trades via the off-platform virtual asset trading services of SFC-licensed platforms, enhancing the flexibility for clients and institutions in conducting virtual asset dealing services. As a result, clause 4.2 of the Terms and Conditions has been removed.
On September 30, 2025, the SFC and the HKMA clarified that client subscriptions and redemptions of investment products using virtual assets, or in-kind subscriptions and redemptions of virtual asset funds, will not be considered as providing virtual asset dealing services. Intermediaries must notify the SFC (and the HKMA) in advance about such activities and ensure compliance with anti-money laundering and counter-terrorism financing regulations.
On September 30, 2025, the SFC and the HKMA issued clarifications regarding the distribution of investment products with exposure to virtual assets, specifying that intermediaries must ensure clients have sufficient net worth to handle the risks and potential losses of trading virtual asset-related products, unless the clients are institutional or qualified corporate investors. Similarly, intermediaries are required to provide risk disclosure statements for clients engaging in virtual asset futures contracts, excluding institutional and qualified corporate investors.
The SFC and the HKMA issued a reminder to intermediaries involved in virtual asset-related activities, instructing them to notify the SFC (and the HKMA, where applicable) before making changes to their activities, including serving new types of clientele, allowing clients to deposit or withdraw virtual assets, providing staking services for the first time, and allowing clients to subscribe for or redeem products using virtual assets. Intermediaries should consult relevant circulars and guidelines for further assistance.
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