Hong Kong Securities and Futures Commission: Financial internet celebrities are the new normal in business, will conduct a more comprehensive review.

With the attention of Hong Kong legislators, the proposed virtual asset regulatory system does not mention financial internet celebrities (KOLs), raising concerns about potential gray areas. Acting Secretary for Financial Affairs and Treasury Bureau, Joseph Chan, stated that financial internet celebrities are not limited to virtual assets, but also involve other investments, emphasizing that the regulatory direction includes the entire financial ecosystem. The Executive Director of the Intermediaries Division of the Securities and Futures Commission, Keith Yip, stated that financial internet celebrities are now a normal part of the business landscape, and the authorities will conduct a more comprehensive review. The Securities and Futures Commission has been closely interacting with the industry since last year to understand and discuss whether there are new regulatory considerations, including licensing and rule optimizations. Yip remarked that financial internet celebrities no longer have traditional relationships with individuals and traditional securities firms, but now have relationships with platforms. However, many of these platforms are not based in Hong Kong, and their coverage has no boundaries, posing challenges for global regulatory agencies. He believes that the priority is to communicate and dialogue with platforms, hoping that platforms will realize that with a large number of users and activities, they must take on a certain responsibility. Some legislators also raised concerns about the lengthy approval process for virtual asset trading platforms, which may cause market concerns, and questioned whether the Securities and Futures Commission needs to increase its manpower for approvals. Yip responded that with more experience in approvals, he believes the processing of license applications will become more efficient. However, he emphasized that more licenses do not necessarily equate to better, as Hong Kong needs to consider market capacity and quality, and the Securities and Futures Commission is confident in achieving a balance.