Julia Leung, the Chief Executive Officer of Hong Kong’s Securities and Futures Commission (SFC), said the regulator is considering opening up spot crypto exchange-traded funds (ETFs) to retail investors. Bloomberg reported.
A spot crypto ETF is an investment instrument that tracks the price of the underlying asset. The ETFs allow investors to have exposure to the assets without owning them directly.
According to Leung, the commission would allow these investments if they comply with the region’s regulations, noting that Hong Kong welcomes proposals that use innovative technology to increase efficiency and customer experience.
“We are happy to try it, as long as new risks are addressed. Our approach is consistent regardless of assets,” she said.
The move signals a possible reversal from the commission’s previous restriction of spot crypto ETFs to retail investors. For context, the regulator has described virtual asset exchange-traded funds (VA ETFs) and exchange-traded products (VA ETPs) as complex products that should only be offered to professional investors in their home countries. updated guidance for the sector last month.
However, this move is in line with Hong Kong’s recent trend of implementing pro-crypto regulations. Throughout the year, Hong Kong has been actively shaping itself as a crypto-friendly region, with numerous initiatives to promote the emerging industry.
These efforts include the introduction of a licensing framework for crypto exchanges, financial support for web3 development, and regulatory mandates urging banks to provide fair treatment to crypto customers.
It should be noted that Hong Kong has already approved the operations of three cryptocurrency ETFs: CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF and Samsung Bitcoin Futures Active ETF.
In recent months, spot-based ETFs have received particular attention from the crypto community, especially with several major financial institutions, including BlackRock and others, filing applications with the U.S. Securities and Exchange Commission (SEC) for a spot-based Bitcoin ETF.
However, despite the market optimism surrounding ETFs, the US SEC has not yet approved any of the filings, but has decided to postpone its decision until next year.