According to the 2023-24 budget report submitted to the Legislative Council on February 6, The Hong Kong Securities and Futures Commission (SFC) plans to hire four additional employees to enhance its supervision of regional virtual asset (VA) providers.
The report indicates that more staff will be hired for the agency’s intermediaries division to assist with evaluating the compliance and risk associated with allowing retail investors to trade virtual assets on authorized platforms.
SFC Chairman Tim Lui stated:
“Recruiting is our focus, especially because much of our work going forward requires a lot of specific expertise.”
He attributed the hiring to the growing number of operators who have expressed interest in running VA businesses, including trading platforms and managing VA funds.
Previously, only professional investors or those with portfolios totaling at least HK$8 million (US$1 million) were permitted to use licensed trading platforms, and obtaining a license was optional.
A new licensing system was adopted as an amendment to the Anti-Money Laundering and Counter-Terrorist Financing Bill in December 2022 and will take effect in June 2023. This will give local firms and government agencies time to prepare for further industry engagement. The SFC plans to initiate a consultation soon on making virtual assets accessible to retail investors.
Lui stated that the SFC is open to hiring experts from both within and outside of Hong Kong and that it is hopeful that Hong Kong’s easing of COVID-19 control measures and the reopening of its borders with the mainland will aid the agency in retaining its expertise.
Lui claims that the SFC lost 18% of its junior employees in 2022, which is an improvement over the 25% loss in 2021. Overall employee losses decreased from last year’s 12% to 11.5% this year.
Amid ongoing global regulatory scrutiny of the cryptocurrency industry, the top financial regulator in Hong Kong proposed new regulations last month, including a ban on algorithmic stablecoins and the requirement for all stablecoin issuers to obtain mandatory licenses.
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