HONG KONG, May 27, 2026 — Hong Kong’s Securities and Futures Commission revised its requirements for SFC-authorised investment funds with virtual asset exposure, setting out the conditions under which funds with virtual asset exposure exceeding 10% of net asset value may be offered to the public in Hong Kong.
The revised circular supersedes the SFC’s April 2025 circular and applies to SFC-authorised virtual asset funds under sections 104 and 105 of the Securities and Futures Ordinance. The requirements do not apply to authorised funds’ exposure to licensed fiat-referenced stablecoins or tokenised deposits, which are addressed separately in SFC guidance.
The SFC said the virtual asset investment landscape had continued to evolve, with a broader range of virtual asset products, including virtual asset-related exchange-traded funds in overseas markets, becoming available to retail and professional investors.
Eligible virtual assets and investment strategies
Under the revised framework, SFC-authorised virtual asset funds may invest directly or indirectly only in virtual asset tokens that are accessible to the Hong Kong public for trading on SFC-licensed virtual asset trading platforms.
Funds may obtain indirect exposure through instruments such as futures traded on conventional regulated futures exchanges and other exchange-traded products, subject to applicable SFC requirements. The SFC said funds should not have leveraged exposure to virtual assets at the fund level.
For funds primarily using a futures-based strategy, the regulator said managers are expected to adopt an active investment approach to allow flexibility in portfolio composition, rolling strategy and handling market disruption events.
Custody, transactions and investor safeguards
The circular requires transactions and acquisitions of spot virtual assets by SFC-authorised virtual asset funds to be conducted through SFC-licensed virtual asset trading platforms or authorised financial institutions, or their locally incorporated subsidiaries, in compliance with Hong Kong Monetary Authority requirements.
Trustees and custodians may delegate virtual asset custody only to SFC-licensed virtual asset trading platforms, eligible authorised financial institutions or other entities acceptable to the SFC.
The SFC also set out custody safeguards, including segregation of fund assets, storage of most virtual asset holdings in cold wallets, and requirements for seeds and private keys to be securely stored in Hong Kong and restricted to authorised personnel.
Disclosure and virtual asset-related activities
The SFC said offering documents and product key facts statements for authorised virtual asset funds should disclose investment limits and key risks, including price risk, custody risk, cybersecurity risk, fork risk and risks linked to virtual asset futures.
The circular also permits SFC-authorised virtual asset funds to engage in staking and other virtual asset-related activities through SFC-licensed platforms or eligible authorised financial institutions, subject to requirements on internal controls, custody arrangements, counterparty due diligence, investor disclosure and ongoing reporting.
Funds seeking authorisation with virtual asset exposure above 10% of net asset value, existing authorised funds planning to exceed that threshold, and authorised virtual asset funds intending to engage in staking or other virtual asset-related activities must consult the SFC and obtain prior approval.
