Hong Kong’s Securities and Futures Commission (SFC) has published a circular providing guidance on how crypto exchanges, or virtual asset trading platforms (VATPs), should handle secondary trading of tokenized funds by retail investors as part of a pilot. The guidance borrows heavily from ETF fund trading rules and includes controls over which tokenized funds can be traded by requiring the product provider to get SFC approval in advance.

“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,…