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ARTICLE · 23 FEBRUARY 2024

SFC Circular On SFC-Authorized Funds With Exposure To Virtual Assets–Part 1

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Earlier this year, the US Securities and Exchange Commission approved 11 spot Bitcoin ETFs. In Hong Kong, in view of rapid developments of virtual asset (VA) products and growing investment products...

United StatesFinance and Banking
K&L Gates
K&L Gates
Anson Chan
Anson Chan

Earlier this year, the US Securities and Exchange Commission approved 11 spot Bitcoin ETFs. In Hong Kong, in view of rapid developments of virtual asset (VA) products and growing investment products offering exposure to VAs, the Securities and Futures Commission (SFC) issued a circular, on 22 December 2023, detailing requirements for investment funds with exposure of more than 10% of net asset value (NAV) to VA seeking authorization for public offerings in Hong Kong (Circular).

The Circular expands the range of “retail VA products” substantially and supersedes a circular on Virtual Asset Futures Exchange Traded Funds issued in October 2022.

The Circular provides requirements for authorization of investment funds, other than recognized jurisdiction schemes (including UCITS funds) and funds authorized under mutual recognition of funds arrangements (MRF), that have an exposure of more than 10% of their NAV in VA by:

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