SFC unveils new regulatory framework to allow secondary trading of tokenised SFC-authorised investment products

The Securities and Futures Commission (SFC) today launched a new regulatory framework to pilot the secondary trading of tokenised SFC-authorised investment products (tokenised products) in Hong Kong, aiming to boost trading activity in the city’s expanding digital asset ecosystem over time.

Set out in a circular, the SFC’s new guidance aims primarily to facilitate secondary trading of tokenised SFC-authorised open-ended funds on SFC-licensed virtual asset trading platforms (VATPs), not least broadening access to regulated trading services for retail investors. However, the SFC may also consider over-the-counter secondary trading arrangements on a case-by-case basis.

Since the SFC first set out its tokenisation-related regulatory framework in late 2023, product issuers in Hong Kong have been keen on tokenising their products and the resulting market opportunities (Note 1). As of March 2026, 13 tokenised products were offered to the public in Hong Kong, with the assets under management of their tokenised classes increasing around seven-fold to $10.7 billion over the past year.

Against this backdrop, it is an opportune time to pilot 24/7 secondary trading to further integrate tokenised products with the Web3 ecosystem through the potential use of regulated stablecoins and tokenised deposits for trading (Note 2). To address the liquidity and investor protection issues of secondary trading of tokenised open-ended funds in general, and trading beyond regular trading hours of the underlying securities, in particular, new measures are built into the framework which is drawn from trading of exchange-traded funds and SFC-licensed VATP infrastructure. The measures cover fair pricing, orderly trading, liquidity provision and disclosure.

“Our new framework marks another major milestone on Hong Kong’s journey to build out a fully integrated, innovative and scalable digital asset ecosystem with robust investor safeguards,” said Ms Julia Leung, the SFC’s Chief Executive Officer. “This initiative allows a traditional securities product, once tokenised, to be traded in the evening and on weekends, and supported by the use of regulated stablecoins and tokenised deposits to facilitate round-the-clock liquidity, satisfying demand of investors reacting to an increasingly fast-moving and uncertain market environment.”  

The initial batch of products is expected to focus on tokenised money market funds. The SFC will review their operation and consider expanding the product scope in due course.

Product issuers and intermediaries, including SFC-licensed VATPs, are encouraged to consult or notify the SFC beforehand on endeavours related to this regulatory framework.   

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Notes:

1. The SFC established the regulatory frameworks for tokenised products and tokenised securities-related activities by issuing two circulars on 2 November 2023: “Circular on tokenisation of SFC-authorised investment products” and “Circular on intermediaries engaging in tokenised securities-related activities”.

2. Regulated stablecoins refer to fiat-referenced stablecoins the issue of which is authorised by a licence granted under the Stablecoins Ordinance.