Hong Kong Financial Services Development Council Chairman Mr Laurence Li Lu-Jen（right 3);Legislative Council Member, Horace Cheung Kwok-Kwan (Right4); HKbitEX Founder & CEO Gao Han (Left4）
Last week the Financial Services Development Council hosted the Future Development of Hong Kong’s Virtual Assets and Securities Token Issuance forum. In attendance were industry experts, including professional firms, academics.
The main topic of discussion surrounded the future development prospects of Virtual Assets and Security Token issuance in Hong Kong and the Guangdong-Hong Kong- Macao Greater Bay Area. Guests at the meeting were in general consensus that Hong Kong must seize development opportunities and strengthen relevant infrastructure facilities in Hong Kong to build a global future Digital financial center.
Gao Han, founder and CEO of HKbitEX a Hong Kong headquartered exchange and OTC platform who is currently applying for a Type 1 and 7 license with the SFC commented that, the Hong Kong SFC has already begun establishing a relevant framework and licensing system for the supervision of Virtual Asset trading platforms and has included them in the Regulatory Sandbox. This will be beneficial to the development of the industry in Hong Kong. The issuance of Security Tokens will have many benefits to our overall financial economic development. Benefits include facilitating financing channels for Green Finance, IP rights, trading finance, enabling high-end technologies such as blockchain, 5G technology, and artificial intelligence. Security Tokens have the ability to support tangible assets which can also help SMEs and high-quality projects quickly raise funds. For local securities brokerage houses, asset management firms and high-volume professional investors, Security Tokens will introduce a new product offering that can strengthen Hong Kong’s position as a wealth management center and serve the Greater Bay Area Market Development.
Laurence Li Lu Jen, chairman of the Board of Directors of the Financial Services Development Council, believes that the development of Virtual Assets and Security Token issuance will be beneficial to Hong Kong if coupled with, good risk management and monitoring by the supervisory authority.
The forum was hosted by Legislative Council Member Horace, Cheung Kwok-Kwan and Deloitte China Audit Partner Lu Robert. A number of guest speakers were invited to attend, including: Hong Kong Financial Services Development Council Chairman Laurence Li Lu-Jen, QBN Capital Managing Partner Dr. Frank Tong, Deloitte China Chairman Dennis Chow, Founder and Chief Executive Officer of HKbitEX, Gao Han, Director of Hong Kong Fintech Association, Ken Lo, Professor of Law at the University of Hong Kong Kerry Foundation, Professor Douglas Arner, Partner of King & Wood Mallesons, Urszula McCormack, Greater Bay Area Homeland Investments Limited, Managing Director of Strategic Investment Division, Yin Cong.
Last year the Securities Regulatory Commission included platforms which provide customers with security-type Virtual Assets or Token trading services into the scope of supervision and will grant licenses to those platforms whom meet their rigorous standards. Licensed platforms will also be included in the SFC's Regulatory Sandbox and will be subject to close and diligent supervision. The main licensing conditions include stipulating that platform operators can only provide their services to Professional Investors, must formulate strict inclusion criteria to screen Virtual Assets that can be traded on their platforms, and only provide services to customers who fully understand Virtual Assets. In addition, platform operators will have to adopt a reputable external market monitoring system to complement their own market monitoring policies and monitoring measures. The platform operator should also ensure that the insurance purchased for the risks involved in the custody of virtual assets takes effect at all times.