On September 26th, Christina Choi of the SFC made a speech at the Bloomberg Buy-Side Forum regarding Enabling Innovation in the Asset Management Industry. The speech discusses the concept of tokenization in the asset management industry, specifically in relation to SFC-authorized products like public funds. Tokenization involves creating blockchain-based tokens that represent ownership in an investment product, which can be recorded digitally on the blockchain and traded on virtual asset trading platforms (VATPs). The speech acknowledges the potential benefits of tokenization, such as increased efficiency, reduced costs, and new distribution channels. However, they also highlight the need for high standards and robust investor protection measures. The SFC is working on detailed guidance for tokenization and is more inclined to allow primary dealing of tokenized products initially, while secondary trading requires careful consideration due to increased risks and the need for proper token ownership records and liquidity management. The SFC invites SFC-authorized product providers to engage with the SFC if they are interested in offering tokenized products.
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