Hong Kong’s SFC Issues Significant Announcements on the Regulation of Virtual Assets

Latham & Watkins LLP

The SFC has outlined its regulatory approach to the management and distribution of virtual asset funds and virtual asset exchanges.

Key Points:

..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.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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