Hong Kong has invited firms interested in security token offerings (STO) to share their proposals with the Securities and Futures Commission (SFC), the regulator’s Fintech department head Elizabeth Wong told digital assets industry representatives last week, according to a press release published on Monday.
See related article: Hong Kong regulator: ramp up oversight of virtual assets
Fast facts
- An STO is a public offering sold in blockchain-based tokens that represent financial assets such as equities.
- There are more than 10 potential issuers in Hong Kong interested in STOs, according to the Under Secretary of Financial Services and the Treasury Bureau (FSTB) Joseph Chan.
- Chan and Wong attended two meetings last week with Invest Hong Kong head of Fintech King Leung and two virtual assets industry representatives to foster STO developments in Hong Kong.
- “We support the sustainable development of STO business in Hong Kong that meets the relevant regulatory and compliance requirements, particularly on ensuring investor protection and addressing the risk on the anti-money laundering/combating of terrorist-financing aspect,” Chan said.
- A proposed amendment to the Anti-Money Laundering and Counter-Terrorist Financing Bill gazetted in June mandates virtual asset service providers to obtain operating licenses from the SFC.
- The licensing regime is proposed to take effect in March 2023.
See related article: How tokenization could transform Hong Kong’s fixed income markets