Hong Kong’s Securities and Futures Commission has issued guidance establishing a new regulatory framework to pilot secondary trading of tokenised SFC-authorised investment products. The framework is primarily designed to enable tokenised SFC-authorised open-ended funds to be traded on SFC-licensed virtual asset trading platforms, broadening access to regulated secondary-market trading services for retail investors, while allowing over-the-counter arrangements to be considered on a case-by-case basis. The pilot is positioned as a step toward round-the-clock secondary trading, including trading outside the regular hours of the underlying securities, and contemplates the potential use of regulated stablecoins and tokenised deposits to support trading and liquidity. Measures built into the framework, drawing on exchange-traded fund trading practices and SFC-licensed virtual asset trading platform infrastructure, address liquidity and investor protection issues through requirements on fair pricing, orderly trading, liquidity provision and disclosure. The SFC cited market growth since its tokenisation circulars issued on 2 November 2023, noting that as of March 2026 there were 13 tokenised products offered to the public in Hong Kong and assets under management in their tokenised classes had risen about seven-fold over the past year to 10.7 billion. The initial batch of products is expected to focus on tokenised money market funds, with scope expansion to be considered after the SFC reviews how the pilot operates. Product issuers and intermediaries, including SFC-licensed virtual asset trading platforms, are encouraged to consult or notify the SFC in advance of activities undertaken under the framework.

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