Hong Kong Securities and Futures Commission: Public fund products with more than 10% of virtual assets must apply to the Securities and Futures Commission by the management institution

ChainCatcher news, the Hong Kong Securities and Futures Commission (SFC) has issued a notice stating that public fund products with a virtual asset proportion exceeding 10% must have their management companies, relevant investment strategies, and product custodians meet corresponding conditions. According to current regulations, generally speaking, institutions holding a Type 9 license from the Hong Kong SFC cannot have a virtual asset proportion exceeding 10% in their fund portfolios. The latest notice clarifies that if the virtual asset proportion exceeds (or is expected to exceed) 10%, the management institution must submit an application to the Hong Kong SFC, and only after obtaining approval from the Hong Kong SFC can the relevant products be sold to Hong Kong investors.

The notice clearly states that, first, companies managing virtual asset funds (funds with a virtual asset proportion exceeding 10%) must have a good compliance record, and at least one employee of the company must have experience in managing virtual assets or related products. The management company must meet the existing or new requirements set by the licensing regulatory authority for virtual asset management companies.

Regarding investment targets, virtual asset funds can only invest in virtual assets traded on Hong Kong licensed virtual asset trading platforms. If investing in futures, it must be in futures contracts traded on exchanges or trading platforms recognized by the Hong Kong SFC.