Hong Kong's securities watchdog has launched a new regulatory framework to pilot the secondary trading of tokenized products, aiming to boost trading activity in the city’s digital asset ecosystem over time.
Set out in a circular, the Securities and Futures Commission’s new guidance aims primarily to facilitate secondary trading of tokenized authorized open-ended funds on virtual asset trading platforms, not least broadening access to regulated trading services for retail investors, according to a statement on Monday.
As of March 2026, 13 tokenized products were offered to the public in Hong Kong, with the assets under management of their tokenized classes increasing around sevenfold to HK$10.7 billion over the past year, the watchdog said.
Against this backdrop, it is an opportune time to pilot 24/7 secondary trading to further integrate tokenized products with the Web3 ecosystem through the potential use of regulated stablecoins and tokenized deposits for trading, it said.
To address the liquidity and investor protection issues of secondary trading of tokenized 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 VATP infrastructure, covering fair pricing, orderly trading, liquidity provision and disclosure, it noted.
The initial batch of products is expected to focus on tokenized money market funds, the SFC said, adding that it will review their operation and consider expanding the product scope in due course.
“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 tokenized deposits to facilitate round-the-clock liquidity, satisfying demand of investors reacting to an increasingly fast-moving and uncertain market environment,” said Julia Leung Fung-yee, the SFC’s chief executive.
