Hong Kong's Financial Services and the Treasury Bureau (FSTB) and Securities and Futures Commission (SFC) have published consultation conclusions for licensing regimes governing virtual asset advisory and management services under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. According to reports from The Block, the consultation showed broad market support for the proposed regimes, with the consultation drawing 51 submissions from market participants, industry groups, chambers of commerce, and professional bodies. The framework aligns the scope of virtual asset advisory and management with existing regulated activities covering securities advisory and discretionary asset management, following the 'same business, same risks, same rules' principle used in traditional finance.
Under the proposed structure, advisory services would capture business activities involving recommendations on the acquisition or disposal of virtual assets, while management rules would apply where firms exercise discretionary control over virtual asset portfolios. As reported by The Block, the regimes set baseline financial resources requirements, including minimum liquid capital of HKD 100,000 ($12,760) for firms not holding client assets, and up to HKD 5 million ($638,095) in paid-up capital alongside HKD 3 million ($328,862) in liquid capital where client assets are held. Additionally, the proposed framework stipulates that dually licensed entities will not face double regulatory capital requirements, instead defaulting to the highest capital floor among their authorized activities. Under the new rules, virtual asset advisory services will align with Type 4 regulated activity under the Securities and Futures Ordinance, while virtual asset management services will align with Type 9 regulated activity, meaning firms managing virtual asset portfolios would face rules similar to traditional asset managers.
Following a comprehensive review of licensed securities brokers, the SFC has introduced additional requirements specifically governing the opening and management of accounts held by Chinese Mainland investors. The regulator's examination of 12 licensed securities brokers found material shortcomings in client verification practices, with some firms accepting questionable or forged client documents without proper due diligence. The SFC has directed all licensed corporations to conduct internal reviews as soon as practicable to determine whether any questionable documentation was accepted during account opening, and to close any accounts where such documentation has been identified. New account openings for Chinese Mainland investors will now require investor declarations going forward to enhance oversight and reduce potential money laundering risks.
The FSTB and SFC aim to introduce a bill to the Legislative Council in 2026 following consultations that closed in January 2026. According to The Block, alongside parallel proposals for virtual asset dealing and custody services, regulators said the combined framework is designed to broaden participation in Hong Kong's digital asset market while supporting what they described as a more robust and secure ecosystem. Secretary for Financial Services and the Treasury Christopher Hui Ching-yu stated that the proposal forms part of Hong Kong's wider digital asset policy, with Policy Statement 2.0 released in June last year setting out the goal of supporting responsible financial innovation while improving risk controls and investor protection. SFC CEO Julia Leung Fung-yee emphasized that the consultation conclusion marks 'the final step' in refining Hong Kong's digital asset regulatory framework, with the regime matching traditional financial service standards to promote responsible innovation while fostering responsible innovation.
