An official at Hong Kong’s financial sector regulator, the Securities and Futures Commission, said on Monday the institution is actively seeking to build a regime to allow digital asset-based exchange-traded funds (ETFs) to be publicly listed and traded in the city.

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Fast facts

  • A circular will be issued later on Monday to reveal more details about the plan, said the SFC’s deputy chief executive officer, Julia Leung.
  • ETFs are a form of pooled securities that track specific assets, which can be a basket of stocks or bonds covering an industrial sector, a single commodity or other investments. 
  • At the initial stage, the underlying assets of the ETFs will be confined to Bitcoin futures and Ether futures traded on the Chicago Mercantile Exchange.
  • “The SFC has been actively looking to set up a regime to authorize ETFs which provide exposure to mainstream virtual assets with appropriate investor guardrails,” Leung said.
  • Monday marks the first day of Hong Kong’s flagship crypto event Fintech Week 2022. The event is seen as a turning point for Hong Kong to declare its return as a crypto hub.
  • In addition to crypto futures-based ETFs, Leung also discussed the SFC’s regulatory considerations over tokenized securities and whether to allow retail investors to enter the investment market.

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