Hong Kong Securities and Futures Commission announces new regulatory framework allowing tokenized securities authorized by the Commission to be bought and sold on the secondary market.

On April 20, the Hong Kong Securities and Futures Commission (SFC) announced a new regulatory framework that allows tokenized SFC-approved investment products (tokenized products) to be traded in the secondary market for the Hong Kong public. The first batch of products is expected to mainly consist of tokenized money market funds. The SFC will monitor the operation of these products and consider expanding the range of products in due course. The SFC issued a circular with new guidelines with the main purpose of facilitating the trading of tokenized SFC-approved open-ended funds on SFC-licensed virtual asset trading platforms in the secondary market, further expanding regulated trading services available to retail investors. However, the SFC will also consider arrangements for over-the-counter secondary market trading on a case-by-case basis. Since the SFC first introduced its regulatory framework for tokenization at the end of 2023, product issuers in Hong Kong have actively tokenized their products and seized market opportunities. As of March 2026, 13 tokenized products have been launched to the Hong Kong public, with the total value of managed assets in tokenized equity shares increasing by approximately seven times to HK$10.7 billion in the past year. Meanwhile, the timing is right to promote round-the-clock secondary market trading, through the potential use of regulated stablecoins and tokenized deposits in related transactions, further integrating tokenized products with the Web3 ecosystem. To address liquidity and investor protection issues in secondary market trading of tokenized open-ended funds (especially outside normal trading hours for related portfolio securities), the new measures refer to existing practices applicable to exchange-traded funds and operations on SFC-licensed virtual asset trading platforms. These measures cover fair pricing, orderly trading, liquidity provision, and disclosure of information. Ms. Leung Fung Yee, Chief Executive Officer of the SFC, said: "The new regulatory framework marks another important milestone in building the digital asset ecosystem in Hong Kong. This comprehensive ecosystem will combine innovation and scalability while providing robust investor protection. The new measures allow traditional securities products to be traded in tokenized form during evenings and weekends, and facilitate round-the-clock liquidity through the use of regulated stablecoins and tokenized deposits to meet the needs of investors in an increasingly fast-changing and uncertain market environment." The SFC encourages product issuers and intermediaries (including SFC-licensed virtual asset trading platforms) to consult with or notify the SFC before engaging in activities related to this regulatory framework.