On October 7, the Securities and Futures Commission (SFC) celebrated its 35th anniversary by reflecting on past accomplishments and plans for the future.
Under the leadership of CEO Julia Leung Fung Yee, the SFC is advancing regulatory frameworks for virtual asset trading and embracing cutting-edge financial technologies.
In a discussion with Hong Kong 01, CEO Julia Leung outlined the Commission’s strategic priorities for the upcoming years, spanning 2024 to 2026. Key focus areas include enhancing the resilience and global competitiveness of Hong Kong’s capital markets, leveraging technology and Environmental, Social, and Governance (ESG) initiatives for market transformation, and boosting institutional resilience and operational efficiency.
A primary initiative under Leung’s leadership has been to refine the regulatory approach to virtual asset trading platforms. “Completing the entire framework will take at least until next year,” noted Leung.
This year, the SFC designated 11 virtual asset platforms as license applicants, having completed the first phase of on-site inspections. Following rectifications, licenses are expected to be issued in batches by the year’s end.
“Applicants who do not meet the requirements will lose their eligibility for a license, while those who meet the criteria will receive conditional licenses,” Leung elaborated.
The SFC is drafting a new licensing regime for Over-the-Counter (OTC) cryptocurrency trading and custody services and is currently gathering feedback from the industry.
OTC derivatives are financial contracts traded directly between two parties, bypassing traditional exchanges. This flexibility allows the contracts to be customized to meet specific needs.
A 2024 McKinsey report projects that tokenized assets, including mutual funds and ETFs, could potentially reach a value of around $1.1 trillion by 2030, driven by the adoption of blockchain technology.
