The Hong Kong Securities and Futures Commission (SFC) has announced, according to The Block’s report, that a comprehensive guide on the tokenization of authorized investment products will be released in the near future. Christina Choi, the Chief Executive Officer of SFC’s investment products division, emphasized in a statement made yesterday that this new guidance will be a significant step in Hong Kong’s financial market.
“SFC is diligently working on detailed guidance for the tokenization of authorized investment products and is making serious efforts in this regard.”Christina Choi
According to Choi’s remarks, SFC’s current consideration is that virtual asset services platforms in Hong Kong should be allowed to engage in the primary trading of SFC-approved tokenized products in the initial stage.
This Development May Bring Legal Regulatory Challenges
However, Choi mentioned that tokenization, in addition to introducing new technological advancements, may also bring along new risks such as legal, regulatory, and supervisory challenges. Therefore, it is believed that the guidance that SFC will release in the near future will aim to establish the framework necessary to regulate and supervise the tokenization process.
Represented as Tokens Instead of Traditional Stocks
Choi also mentioned that secondary trading of tokenized products would make these products easily accessible, much like products traded on a traditional exchange. In this case, the Futures and Securities Platform (VATP) will function as a platform facilitating the secondary trading of tokenized securities and other products. The only difference is that these products will be represented as tokens instead of traditional stocks.