Hong Kong finalizes licensing for virtual asset advice

Hong Kong’s financial regulators have finalized plans to introduce a formal licensing regime for firms providing virtual asset investment advice and portfolio management, marking a significant expansion of the city’s digital asset regulatory framework. The Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) published the conclusions of a public consultation on the proposed rules.

The new framework will operate under the principle of “same business, same risks, same rules,” aligning virtual asset services with existing regulations for traditional securities. Virtual asset advisory services will be regulated under the Type 4 licensing category of the Securities and Futures Ordinance, which governs securities advice. Virtual asset portfolio management will fall under the Type 9 category for asset management.

Authorities stated the consultation, which closed in January, received broad support from market participants, including industry groups and professional bodies. The regulators plan to submit the legislative proposals to Hong Kong’s Legislative Council in 2026.

The regime establishes specific capital requirements based on a firm’s...