The Hong Kong Securities and Futures Commission (SFC) recently issued two important regulatory guidelines: the "Circular on Sharing Liquidity by Virtual Asset Trading Platforms" and the "Circular on Expanding Products and Services of Virtual Asset Trading Platforms." These aim to further promote the internationalization of Hong Kong's virtual asset market and diversify the products and services offered by local platforms. Through these documents, the SFC has introduced new regulatory requirements for the operation of virtual asset trading platforms, with the goal of enhancing market liquidity, broadening product ranges, and ensuring effective protection of investor interests.

First, regarding the guidance on sharing liquidity among virtual asset trading platforms, the SFC explicitly stated that platform operators can integrate trading orders with overseas platforms and jointly manage shared order books. This initiative is a key component of the ASPIRe roadmap, aiming to establish Hong Kong as a hub for international virtual asset trading by accessing global liquidity. This move will provide Hong Kong investors with deeper market liquidity, more competitive pricing, and reduced additional trading risks. Through cross-platform trading, Hong Kong's virtual asset market will become more efficient, and market prices will be more transparent.

However, the SFC emphasized that while shared liquidity will bring multiple benefits to platforms and investors, it also carries settlement risks, particularly in cross-border transactions. Platform operators need to implement strict settlement and monitoring measures to ensure the smooth execution of trades. For example, platforms must ensure that all trading orders are pre-funded before execution and that settlement assets are held in designated custody accounts. Additionally, platforms need to employ robust monitoring systems to ensure compliance with market behavior regulations and prevent market misconduct.

To further drive the development of the virtual asset market, the SFC clarified in the second document that it will expand the types of products and services that licensed virtual asset platforms can offer. Specifically, the SFC no longer requires virtual assets (including stablecoins) purchased by professional investors to have a 12-month track record, providing more room for the introduction of innovative products. At the same time, platforms can also offer custody services to clients, particularly for virtual assets or tokenized securities not traded on the platform.

This move by the SFC aims to diversify the virtual asset ecosystem by expanding product varieties, further meeting the needs of different investors. This includes further clarifying regulatory requirements for tokenized securities, enabling platforms to better offer diversified investment products, including tokenized securities, to investors. Additionally, virtual asset trading platforms are encouraged to provide more diversified digital asset custody services, including custody for tokens not traded on the platform. These measures will undoubtedly bring more innovation opportunities to Hong Kong's virtual asset market, driving the industry toward higher levels of development.

In summary, the SFC's new guidelines not only strengthen the regulation of virtual asset trading platforms but also further promote the integration of global market liquidity and diversified products. These initiatives will provide investors with more choices while enhancing market transparency and stability. As Hong Kong's influence in the global digital asset trading landscape continues to grow, the regulatory framework and market mechanisms for virtual assets will become more mature, offering investors a safer and more favorable trading environment.