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Hong Kong's SFC Allows Licensed Virtual Asset Brokers to Provide Margin Financing

2 hours ago

On February 11, Hong Kong’s Securities and Futures Commission (SFC) released new guidance allowing licensed brokers offering virtual asset trading services (virtual asset brokers) to expand their scope to include margin financing. The regulator also established a high-level framework to guide virtual asset trading platforms in proposing leveraged virtual asset products for professional investors. These changes align with the SFC’s ASPIRe roadmap, which focuses on diversifying product and service offerings. Under the new rules, virtual asset brokers may offer virtual asset financing to their securities margin clients—provided they meet requirements for adequate collateral and strong investor protection. This is expected to boost participation from margin clients with solid credit and collateral, while enhancing Hong Kong’s virtual asset market liquidity in a risk-controlled framework. For licensed virtual asset trading platforms, the SFC has for the first time rolled out a high-level framework to guide the development of perpetual contracts: leveraged products exclusively for professional investors. The framework is intended to help investors implement risk management strategies and improve liquidity for underlying assets in the spot market. To safeguard investors, it requires leveraged products to have transparent design, clear disclosures, and robust operational monitoring. To further boost virtual asset trading in Hong Kong, the SFC now permits affiliates of licensed platforms to act as market makers—provided strict safeguards are in place to address conflicts of interest. Their participation is expected to add liquidity channels to these platforms. Dr. Thomas Atkinson, the SFC’s Executive Director of Intermediaries, stated: “We’re taking a step-by-step approach aligned with the ASPIRe roadmap—critical for the scalable growth of Hong Kong’s digital asset market. These targeted measures aim to boost market liquidity and reflect the SFC’s strong commitment to building a sustainable, collaborative digital asset ecosystem in Hong Kong.” The SFC will continue to closely monitor the rollout of these measures and engage with stakeholders to ensure they help build a safe, competitive market environment in Hong Kong.
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