The Securities and Futures Commission of Hong Kong (SFC) has made important changes to its virtual asset policy.
They have put in place a set of strict measures to protect retail investors and make them more aware of virtual asset goods.
The regulatory body is taking proactive steps to protect the interests of regular people who invest in digital assets in a world where the financial world is changing quickly.
The updated rules from the SFC lay out two main ideas:
Complex Products Should Only Be Available to Professional Investors:
- The SFC says that virtual asset products that are classified as complex goods should only be available to professional investors. The goal of this move is to protect the interests of regular investors by limiting their access to more complicated and risky products.
Evaluation of Investor Knowledge and Training:
- The SFC puts a lot of weight on the role of middlemen in judging the knowledge and skills of customers when it comes to virtual assets. This is especially important for non-professional investors. If buyers don’t know enough about virtual assets, middlemen are required to give them full training so that customers fully understand what they are and the risks that come with them.
In addition, intermediaries are responsible for making sure that their clients have enough money to cover any losses that might come up during deals involving virtual assets.
The SFC made it clear that its policy means that non-professional investors can’t get their hands on complex virtual asset goods.
Retail buyers may still be able to buy some exceptions, like publicly traded virtual asset exchange-traded funds (ETFs) that have permission from the SFC and are listed on the Stock Exchange of Hong Kong Limited.
This approach makes sure that investors are well-informed and educated before they buy or sell products linked to virtual assets.
This framework gives middlemen the power to evaluate and improve investors’ knowledge while ensuring that these actions are in line with their financial abilities.
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