The SFC has outlined its regulatory approach to the management and distribution of virtual asset funds and virtual asset exchanges.
..Investor protection is paramount and the SFC is taking steps to tighten its supervision of funds that invest in virtual assets and distributors of such funds.
..SFC-licensed asset managers and fund distributors should only sell virtual asset funds to “professional investors” (which include high net-worth individuals) and not to the retail market.
..SFC-licensed asset managers who manage funds that invest in virtual assets will be subject to enhanced regulatory requirements that relate to disclosure, custody, risk management, and regulatory capital.
Please see full Alert below for more information.