- Hong Kong Securities Group is asking on the SFC to calm down digital asset guidelines, cut back compliance prices and simplify the CVAP examination course of.
- Regulators are contemplating modifications to CVAP, together with elective coursework and decrease charges, amid licensing uncertainty.
- The trade is asking for crypto derivatives, clearer guidelines and a lowered compliance burden to assist Hong Kong change into a hub.
The Hong Kong Securities and Futures Skilled Affiliation has referred to as on the Securities and Futures Fee (SFC) to enhance the regulatory framework for digital property. The group is asking for decrease compliance prices, enhancements to the Digital Asset Platform Practitioner Examination (CVAP), and clearer steering on a number of regulatory points.
The request adopted a current assembly between the affiliation and the Hong Kong Monetary Regulatory Authority. Individuals included Chang Ho-lim, Vice-Minister of Monetary Companies, and representatives from the Ministry of Finance and the SFC Middleman Division.
The affiliation mentioned the SFC has agreed to pursue a number of enhancements to the CVAP qualification system. This consists of separating exams from obligatory topics, offering official examine supplies, and decreasing examination charges. The regulator additionally urged that candidates could ultimately be capable to sit the examination with out first finishing a coaching course.
Nevertheless, the affiliation mentioned it might proceed discussions with the SFC, Monetary Companies and Treasury Division on unresolved points. These embrace self-custody guidelines for personal fairness funds, cost laws for digital property, and the excellence between expertise suppliers and controlled monetary actions.
Trade seeks to cut back compliance prices
The affiliation mentioned some components of Hong Kong’s new digital asset framework stay too broad. He argued that the shortage of readability creates operational uncertainty for corporations getting into this area.
One of many trade’s issues is the elimination of the earlier 10% minimal funding exemption for digital asset administration. The group additionally criticized the instant implementation of latest guidelines with out a transition interval.
Though the framework is now in drive, market individuals mentioned key particulars stay unclear. They’re calling for extra readability on licensing necessities, permitted enterprise actions, and asset allocation guidelines.
Licensed digital asset platform operators additionally face rising compliance prices. The affiliation referred to as on regulators to undertake a extra versatile strategy by reviewing necessities for hot and cold pockets allocation, insurance coverage protection, {hardware} encryption, and on-chain switch procedures.
The group mentioned that by decreasing pointless operational burdens, licensed digital asset buying and selling platforms can stay aggressive whereas sustaining investor safety.
Associated: Hong Kong expands digital forex tax reporting to eight,000 extra corporations
Searching for clearer licensing steering
One other key subject was the regulatory therapy of expertise corporations serving the digital asset trade.
The affiliation referred to as on regulators to obviously distinguish between corporations that present expertise infrastructure and people who perform regulated monetary actions. The group argued that corporations that don’t maintain buyer property or accumulate transaction-based charges shouldn’t mechanically require a license.
Trade representatives additionally requested classification tips for enterprise fashions equivalent to software program improvement, expertise integration, transactional assist, and advisory providers. They mentioned a clearer definition would cut back regulatory uncertainty.
In the meantime, the SFC admitted that it’s going through workers shortages and recruitment challenges as functions for digital asset licenses proceed to rise. The affiliation referred to as on regulators to problem clearer approval timelines and milestone-based overview processes to assist corporations higher plan staffing and capital allocation.
Trade desires extra crypto merchandise
The affiliation additionally referred to as on regulators to broaden Hong Kong’s digital asset market by rushing up the approval of digital forex derivatives.
At present, retail traders can solely commerce in 5 authorised cryptocurrencies: Bitcoin, Ethereum, Avalanche, Chainlink, and Solana. You’re additionally restricted to long-only positions and would not have entry to hedging devices.
Trade insiders imagine that crypto derivatives will strengthen Hong Kong’s place as a worldwide digital asset hub. He additionally mentioned these merchandise will present traders with extra superior threat administration instruments.
Rules for crypto-asset cost companies have been additionally mentioned on the assembly. This additionally consists of corporations working beneath a Cash Companies Operator (MSO) license whereas facilitating large-scale crypto cost providers. The affiliation referred to as for clearer steering on which regulators would oversee these actions and referred to as for a proper implementation roadmap.
Moreover, individuals mentioned operational requirements for self-custody preparations by personal fairness funds. Subjects embrace asset segregation, entry controls, audit necessities, and whether or not advance notification to Chinese language regulators is required.
Trying forward, the affiliation and regulators additionally exchanged views on new dangers arising from quantum computing, synthetic intelligence governance, and cross-border digital RMB funds. The affiliation mentioned it would proceed to supply compliance workshops and coverage briefings as Hong Kong’s digital asset regulatory framework evolves.
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