The Securities and Futures Commission (SFC) of Hong Kong has officially introduced a comprehensive regulatory framework for tokenized investment products, marking a significant step in integrating digital assets with traditional finance. The framework permits licensed virtual asset trading platforms (VATPs) to trade SFC-recognized tokenized investment products—primarily open-ended funds—on the secondary market. It also opens the door for exploring over-the-counter (OTC) trading mechanisms.
Core Features: Drawing from ETF and VATP Operations
The new rules were developed by incorporating operational mechanisms from both exchange-traded funds (ETFs) and virtual asset trading platforms, addressing key requirements for pricing, liquidity, and disclosure. The SFC mandates that platforms ensure transparent price discovery, sufficient secondary market liquidity, and full disclosure of product structures and risks. This aims to provide investors with a trading experience that is more efficient and transparent than traditional fund transactions.
Market Snapshot: 13 Products Issued with Over HK$10.7 Billion in Assets
As of March 2026, Hong Kong had issued 13 tokenized investment products to the public, managing total assets of approximately HK$10.7 billion (about US$1.37 billion). These products cover equities, bonds, and hybrid funds, reflecting robust demand for tokenized financial instruments. The new framework is expected to accelerate product launches from more asset managers.
Regulatory Impact: Strengthening Hong Kong's Virtual Asset Hub Status
The SFC's framework is the latest in a series of regulatory measures to solidify Hong Kong's position as a global virtual asset center. Following the licensing regime for VATPs and stablecoin sandbox introduced since 2023, this new rule expands permissible activities for licensed platforms. Industry observers believe it will attract traditional asset managers into the digital space while offering compliant and secure investment channels for both retail and institutional investors.
The SFC stated it will continue monitoring market developments and adjust rules as needed, adhering to the principle of “same business, same risks, same regulation” to balance innovation and investor protection. The implementation date will be announced separately, but platforms are already preparing to submit product applications.