TechFlow reports that in an updated joint circular on virtual asset-related activities of intermediaries, the Hong Kong Securities and Futures Commission (SFC) stated that virtual asset futures may only be traded on traditional regulated futures exchanges. Management companies must demonstrate (i) that the relevant virtual asset futures have sufficient liquidity, and (ii) that the roll-over costs of such futures are manageable, as well as explain how these rolling costs are managed. For SFC-authorized virtual asset funds engaging in spot virtual asset transactions and acquisitions, such activities should be conducted through SFC-licensed virtual asset trading platforms or recognized financial institutions (or their approved locally registered subsidiaries), particularly meeting the following two requirements: (a) regarding cash subscriptions and redemptions, SFC-approved spot ETFs should acquire and dispose of spot virtual assets via licensed virtual asset trading platforms; (b) for in-kind subscriptions, participating dealers (PDs) should transfer spot virtual assets held domestically or overseas into SFC-recognized spot virtual asset ETFs.
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