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 <p class="is-style-lead">Hong Kong’s Securities and Futures Commission (SFC), the independent statutory body tasked with regulating the <a rel="noopener noreferrer nofollow" title="securities" href="https://thebittimes.com/tag/securities.html">securities</a> and futures markets, has released two circulars aimed at overseeing the <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a>ization of digital assets.</p>
 <p>These circulars provide guidance for intermediaries engaged in tokenized securities activities and delineate the criteria for tokenizing investment products authorized by the SFC.</p>
 <h2 class="wp-block-heading" id="retaining-responsibility">Retaining responsibility</h2>
 <p>In the&nbsp;announcement dated Nov. 2, the SFC states that when intermediaries, such as fund managers overseeing <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a>ized funds, issue or have substantial involvement in the issuance of Tokenized Securities they intend to handle or advise on, they retain responsibility for the overall management of the <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a>ization process, even if they outsource components to third-party vendors or service providers.</p>
 <p>The circular also states that Virtual Asset Trading Platform Operators (VATPs) are mandated to establish an SFC-approved compensation arrangement to safeguard against potential security <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a> losses in accordance with the Guidelines for VATP Operators.&nbsp;</p>
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 <p>The SFC has stated that it is open to considering, upon application by a VATP, the possibility of exempting specific Tokenised Securities from mandatory coverage on a case-by-case basis, seeking to provide flexibility in the regulatory framework.</p>
 <h2 class="wp-block-heading" id="leading-with-investor-protection">Leading with investor protection</h2>
 <p>The SFC further reinforces their dedication to <a rel="noopener noreferrer nofollow" title="investor" href="https://thebittimes.com/tag/investor.html">investor</a> <a rel="noopener noreferrer nofollow" title="protection" href="https://thebittimes.com/tag/protection.html">protection</a> in an earlier&nbsp;Sept. 13 announcement&nbsp;where it reminded residents to remain cautious when dealing with unregulated platforms, which at the time included JPX, a cryptocurrency exchange that was operating without regulatory approval.&nbsp;</p>
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   <noscript><iframe title="Crypto platform JPEX halts some transactions amid Hong Kong probe" width="1020" height="574" src="https://www.youtube.com/embed/QQoIOg5mryA?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
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 <p>The platform has since halted some transactions amid the accusations.</p>
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  <svg class="cn-block-related-link__icon icon" aria-hidden="true"><use xlink:href="#"></use>
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/sfc-aims-to-offer-clarity-and-investor-protection-in-tokenized-securities-activities-tbt68852.html">https://thebittimes.com/sfc-aims-to-offer-clarity-and-investor-protection-in-tokenized-securities-activities-tbt68852.html</a></p>

SFC aims to offer clarity and investor protection in tokenized securities activities

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