Hong Kong regulators require only professional investors to be able to invest in such products.
Hong Kong financial regulators have released new guidance for brokers looking to offer virtual asset-linked products such as ETFs. The new rules cover products like spot Bitcoin ETFs.
According to a circular issued today, the Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) stated that spot markets for digital assets are largely unregulated and there is a high probability of problems with investor protection. It was also emphasized that the lack of transparency in pricing paved the way for market manipulation.
The circular states that Hong Kong’s new rules are designed to protect investors and limit spot products to be offered to professional investors only. Another requirement requires service providers to test their clients on their knowledge of digital assets.
For products based on derivative products, the rules will not be so strict. The “professional investors only” restriction in the circular will apply to spot products.
In the new guide, it was stated that only professional investors can invest in non-derivative ETF products offered abroad.
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