UBS Group is set to make a strategic move into the crypto market by allowing select clients in Hong Kong to trade crypto-linked exchange-traded funds (ETFs).
Access to Crypto-Linked Futures ETFs
According to an inside source, UBS will provide its wealthy clients access to three crypto-related futures ETFs, all authorized by the Hong Kong Securities and Futures Commission (SFC). The available ETFs include Samsung Bitcoin Futures Active, CSOP Bitcoin Futures, and CSOP Ether Futures ETFs. Notably, clients will also have educational resources at their disposal to comprehend the associated risks.
This decision follows in the footsteps of its competitor, HSBC, as both financial giants aim to capitalize on the emerging crypto market in the city. HSBC, the leading bank in Hong Kong, has long featured the three aforementioned ETFs on its investment platform, establishing a precedent for UBS's move into the crypto space.
Crypto Landscape in Hong Kong
Hong Kong is deliberating on granting direct retail access to spot ETFs investing in cryptocurrency. Julia Leung, the CEO of the SFC, mentioned in a recent Bloomberg interview that the regulator is evaluating retail investment products utilizing innovative technology to enhance efficiency and customer experience.
Despite Hong Kong's efforts to position itself as a forward-looking financial center, recent challenges have emerged. The unlicensed JPEX exchange faced allegations of fraud, leading to increased scrutiny of the crypto industry. In response, the SFC joined forces with local law enforcement to monitor suspicious activities closely.
Hong Kong’s New Regulatory Regime
On June 1, Hong Kong implemented a digital-asset regulatory framework, balancing investor protection and the promotion of a crypto hub. Retail investors are permitted to trade major tokens on licensed exchanges, and the SFC is currently assessing the possibility of allowing spot crypto ETFs.
In a recent update to its guidance on virtual asset-related activities for intermediaries, the SFC expanded the investor range for crypto ETF engagement. Intermediaries are required to assess their clients with a knowledge test for virtual assets before facilitating transactions, with exemptions for institutional investors and qualified corporate professional investors.
As of June, Hong Kong initiated its crypto licensing regime for virtual asset trading platforms. This move allowed licensed exchanges like HashKey and OSL to offer retail trading services, contributing to the city's evolving crypto landscape.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
