Huobi Tech seeks to launch a Hong Kong ETF to track cryptocurrencies as advocates bet on easier rules for retail investors to indirectly own virtual assets
- Fund manager Huobi Tech is preparing for ETFs that track cryptocurrency assets such as bitcoin
- A recent relaxation on retail ownership on foreign ETFs has fuelled hopes that Hong Kong funds can also track the US$2 trillion cryptocurrency assets
Huobi Tech is seeking to expand its exchange-traded fund (ETF) business in Hong Kong with a financial product that tracks cryptocurrencies for retail investors, taking a cue from the city’s recent guidelines for the sale of virtual assets.
The Hong Kong-listed company has submitted a plan to the Securities and Futures Commission (SFC), structuring the financial product so that it is accessible to retail investors with less than HK$8 million (US$1 million) in assets, according to people familiar with the matter.
Having “all the trading and redemption done directly in Hong Kong … would give better protection to investors, as the fund will be regulated under Hong Kong law,” said Huobi Tech’s senior vice-president Romeo Wang, without commenting on Huobi’s application. “We will keep close and positive communications with regulators including the SFC” to “obtain the proper licences and approvals.”
The SFC relaxed its “professionals only” rule for ETFs that are already transacted on regulated exchanges in 13 “designated jurisdictions” such as the UK, US and Germany. The SFC made the exception because the financial products “give rise to less investor protection issues which commonly exist in the cryptocurrency spot markets, such as pricing transparency and potential market manipulation,” a spokesman said in response to a query by South China Morning Post.