SFC aims to offer clarity and investor protection in tokenized securities activities
Hong Kong’s Securities and Futures Commission (SFC), the independent statutory body tasked with regulating the securities and futures markets, has released two circulars aimed at overseeing the token ization of digital assets. These circulars provide guidance for intermediaries engaged in tokenized securities activities and delineate the criteria for tokenizing investment products authorized by the SFC. Retaining responsibility In the announcement dated Nov. 2, the SFC states that when intermediaries, such as fund managers overseeing token ized funds, issue or have substantial involvement in the issuance of Tokenized Securities they intend to handle or advise on, they retain responsibility for the overall management of the token ization process, even if they outsource components to third-party vendors or service providers. The circular also states that Virtual Asset Trading Platform Operators (VATPs) are mandated to establish an SFC-approved compensation arrangement to ...