The SFC launched a consultation on proposed requirements designed to protect investors and reduce the risks associated with virtual assets trading platforms. Under the new licensing regime, virtual asset trading platforms must demonstrate that they adhere to the same standards for investor protection as other securities and futures intermediaries regulated by the SFC. The SFC’s proposed regulatory requirements for virtual asset trading platforms include
- a fit and proper assessment of staff,
- the adoption of appropriate risk management policies and procedures,
- establishing measures to protect client assets,
- implementing systems capable of monitoring suspicious trades and transactions and managing potential conflicts of interest.
The SFC also proposes additional measures, such as requiring firms to implement appropriate measures to monitor potential market manipulation, have robust safeguards against money laundering and terrorist financing, have internal control systems and procedures, and have regular reviews of corporate governance matters. In addition, the SFC has also proposed that all virtual asset trading platforms should be subject to the same anti-money laundering (AML) regulatory requirements as existing licensed or registered entities. This includes adopting customer due diligence, know-your-customer (KYC) processes, and a reporting obligation to SFC upon suspicious transactions. The consultation also seeks views on whether activities in relation to virtual asset futures contracts should be subject to additional or separate requirements. All interested parties could submit comments on the SFC’s consultation paper by 31 March 2023. All submissions should be made through the official SFC website.
resource: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=23PR5