To maintain the financial stability and facilitate the economic growth of Hong Kong, regulators have been reviewing regulations, guidelines and compliance regularly. Regulators around the globe may introduce new requirements or take enforcement actions from time to time. In our ‘financial services sector updates’, it will include the latest development of the sector for your reference:
Release of consultation conclusions on the legislative proposal for a regulatory regime for stablecoin issuers in Hong Kong
The Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) released the consultation conclusions on their proposed regulatory regime for fiat-referenced stablecoin (FRS) issuers in Hong Kong on 17 July 2024.
The consultation, completed in February 2024, received 108 submissions from industry stakeholders, with overwhelming support for introducing regulations for FRS issuers. Respondents agreed that a regulatory framework is crucial to manage the potential monetary and financial stability risks associated with the growing use of virtual assets (VAs), while providing transparency and guardrails.
The proposed regulations and implementation arrangements received general approval, with some suggestions for enhancements.
Secretary for Financial Services and the Treasury, Christopher Hui, emphasized that this new licensing regime, alongside existing regulations for VA trading platforms, will further strengthen Hong Kong's VA regulatory framework, aligning with international standards and mitigating financial stability risks.
HKMA Chief Executive Eddie Yue expressed gratitude for the valuable feedback and welcomed the support for the proposed regime. He stated that a well-regulated environment is essential for the sustainable and responsible development of the stablecoin ecosystem in Hong Kong.
The FSTB and HKMA will incorporate the feedback received into the final legislative proposal, aiming to introduce a bill into the Legislative Council as soon as possible. The consultation conclusions are available on the FSTB and HKMA websites. The HKMA is also currently processing applications for the stablecoin issuer sandbox, with the list of participants to be announced shortly.
Read more from the source:
https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/07/20240717-3/
Conclusions from the Consultation on the Review of the Three-Tier Banking System
The Hong Kong Monetary Authority (HKMA) has published the conclusions of its public consultation on the review of the three-tier banking system on 5 August 2024 to propose a transition to a two-tier system.
The HKMA received seven submissions in support of its proposed merger of deposit-taking companies (DTCs) into restricted licence banks (RLBs). To ease the transition, the HKMA has introduced new parameters:
- Existing DTCs will be converted to RLBs without needing fresh license applications, provided they meet the minimum RLB capital requirement (HK$100 million) within the five-year transition period.
- Converted RLBs can continue to hold and renew existing deposits taken prior to the upgrade, up to the end of the transition period, subject to the pre-existing DTC deposit size (HK$100,000) and maturity (3 months) requirements.
HKMA Chief Executive Eddie Yue expressed appreciation for the industry's support and stated that the HKMA will provide guidance to DTCs during the transition. The HKMA will now work with relevant parties to implement the proposal through legislative amendments.
The Conclusions Paper is available on the HKMA website.
Read more from the source:
https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/08/20240805-5/
First District Court hearings for three social media ramp-and-dump cases with 18 defendants
The District Court commenced hearings for three major social media ramp-and-dump cases involving 18 defendants, including suspected ringleaders. These cases, previously handled by the Magistrates’ Court, were transferred due to their complexity and scale.
The prosecutions, stemming from joint investigations by the Securities and Futures Commission (SFC) and the Police, allege that the defendants manipulated share trading through numerous nominee accounts and social media platforms, targeting Eggriculture Foods, Fullwealth Construction, and KNT Holdings.
The 18 defendants, facing charges related to ramp-and-dump schemes, will be tried separately. Four individuals face charges in two of the three cases.
No pleas were entered, and the cases were adjourned to 12 November 2024. Bail conditions were maintained, with defendants prohibited from leaving Hong Kong.
Read more from the source:
https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/enforcement-news/doc?refNo=24PR121
SFC’s warning to public regarding Proxinex for suspected virtual asset-related fraud
The Securities and Futures Commission (SFC) warns the public of suspected virtual asset-related fraud by an entity named Proxinex. Investors have reported being unable to withdraw their assets and have been told their accounts do not exist.
The SFC suspects Proxinex may have lured investors through a recruited agent using dating apps. This agent may have fabricated documents to appear legitimate, including those from a local financial regulator and a financial institution.
Proxinex and its website are now on the SFC's Suspicious Virtual Asset Trading Platforms Alert List. While the website is currently inaccessible, be aware of similar domain names as these scams can easily resurface.
Investors should be vigilant and exercise caution when making investment decisions, as online investment scams can involve any asset and are perpetrated through many channels
Read more from the source:
https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=24PR129
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