SFC allows retail access to regulated VA dealing, advisory and discretionary account management

November 2023

On 20 October 2023, the Securities and Futures Commission (‘SFC’) and the Hong Kong Monetary Authority (‘HKMA’) published a joint circular on intermediaries’ virtual asset-related activities (‘Circular’), along with a set of updated appendices. The most important change made in the Circular is the lifting of the restrictions on intermediaries licensed for virtual asset (‘VA’) dealing, advisory and management (‘Intermediaries’) against providing these services to retail investors subject to certain conditions.

The Circular is certainly a welcome step in opening up VA distribution, VA dealing, VA advisory and VA management services to retail clients. This is good news for industry participants, and is also in line with what is happening with other parts of the ecosystem (for example, the introduction of the VATP licensing regime and allowing retail customers to access exchange services).

It will be interesting to see how this "seismic shift" in allowing retail access to VA related services will impact Intermediaries in the coming days. Opening up an entirely new sector and revenues streams can only be a positive development for the industry as a whole. On balance, the safeguards the regulators have built around this nascent market are, in our view, measured and sensible.

This publication was jointly published by PwC Hong Kong and Tiang & Partners.

Tiang & Partners is an independent Hong Kong law firm and a member of the PwC network.