Hong Kong markets watchdog SFC ‘very supportive’ of new tech, ‘happy to discuss’ tokenisation with fund industry

‘If you want to tokenise a public fund, we would be happy to discuss with the industry’, Elizabeth Wong, SFC’s director of licensing and head of its fintech unit, says

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A general view of Hong Kong’s Victoria Harbour. The SFC says it will be continuously amending and evolving its policy to give retail investors better access to cryptocurrency investments. Photo: AFP

Published: 8:30am, 6 Jun 2023Updated: 9:03am, 6 Jun 2023

Hong Kong’s markets watchdog is “very supportive” of the industry using new technology, including tokenisation, an executive of the Securities and Futures Commission (SFC) said on Monday.

“We support tokenisation,” Elizabeth Wong, director of licensing and head of the commission’s fintech unit, told a conference of the Hong Kong Investment Funds Association. “If you want to tokenise a public fund, we would be happy to discuss with the industry.”

Retail investors in Hong Kong have been able to buy big-cap cryptocurrency tokens, such as bitcoin and Ether, on licensed virtual-asset platforms since February, after the SFC began providing certain regulatory oversight and investor protection to vibrant but unregulated cryptocurrency investment activities. The commission said on Monday that it would apply the same code of conduct to fund managers looking to invest their portfolios in virtual assets, with adjustments for risks and concerns specific to virtual assets.

The SFC will be continuously amending and evolving its policy to give retail investors better access to cryptocurrency investments, Wong said.

When implemented correctly, blockchain technology can ensure or enhance efficiency, she told a panel about the tokenisation of the fund industry. “[Blockchain] can improve transparency and also reduce settlement times … these can be applied to tokenisation of funds.”