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The Securities and Futures Commission of Hong Kong will release a “high-level framework” permitting perpetual contracts, according to SFC CEO Julia Leung.
Securities and Futures Commission CEO Julia Leung (CoinDesk)
HONG KONG — Financial authorities in Hong Kong are set to introduce a framework for trading platforms to facilitate perpetual contracts, as stated by the head of the region’s Securities and Futures Commission on Wednesday.
Brokers in Hong Kong will soon have the capability to offer financing to clients supported by bitcoin and ether , and platforms will be authorized to conduct market-making via independent units, Leung noted at CoinDesk’s Consensus Hong Kong conference.
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Although the SFC intends to provide further details in the future, these actions are part of the regulator’s comprehensive strategy to enable regulated entities to offer a wider array of products and services, Leung explained, in line with its 2025 roadmap aimed at advancing the local crypto market.
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The SFC has already released the findings from its consultation on custody and related matters, but these latest initiatives aim to continue fostering the development of markets in Hong Kong, including innovative offerings such as perpetual futures contracts.
"We will be publicizing a high-level framework for platforms to be offering perpetual contracts," she stated.
Currently, these products will only be accessible to institutional investors, excluding retail clients, she mentioned, and the framework will emphasize risk management. Platforms wishing to provide these products must effectively manage associated risks, "and it also has to be very fair to the customers."
Regarding other initiatives, Leung indicated that the SFC will begin sharing additional details shortly.
"We will allow brokers to offer financing to clients with strong … credit profiles, and the collateral will be secured by both securities and virtual assets," she noted. "Given that virtual assets … many of them are highly volatile, we’ll start with two that will qualify as collateral, bitcoin and ether."
Platforms aiming to participate in market-making must ensure they have robust conflict-of-interest regulations and independent market-making divisions, she added.
