Hong Kong initiates licensing regimes for virtual asset providers, enhancing regulatory framework for digital assets

FSTB and SFC publish consultation conclusions on legislative proposals for regulating virtual asset dealing and custodian services

The Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) today (December 24) jointly published the consultation conclusions on the legislative proposals for establishing licensing regimes for virtual asset (VA) dealing and custodian service providers. The FSTB and the SFC also launched a further public consultation today for one month on establishing separate licensing regimes for VA advisory and management service providers.

During the two-month public consultation period completed this August, 101 and 93 submissions were received on the proposed licensing regimes for VA dealing service providers and VA custodian service providers respectively. The majority of respondents, including market participants, industry associations, business and professional organisations, expressed clear support for expanding the regulatory scope to cover VA dealing and custodian services, following the introduction of the licensing regime for the VA trading platform in June 2023. This is considered a critical step to promote the steady and sustainable development of the digital asset (Note) ecosystem in Hong Kong. The respondents also indicated support for the overall direction of the proposed regulatory requirements and implementation arrangements, while suggesting enhancements and seeking clarifications on certain aspects.

The proposed licensing regime for VA dealing service providers will largely align with that for Type 1 (dealing in securities) regulated activity under the Securities and Futures Ordinance (Cap. 571) as applicable to conventional securities dealing activities. As for VA custodian service providers, the proposed licensing regime will focus on managing risks relating to safekeeping private keys of client VAs in Hong Kong, which is the core risk area of VA custody, with a view to enhancing the security of client assets.

The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "The proposed establishment of licensing regimes for VA dealing and custodian service providers marks a significant step in enhancing our legal framework for digital assets. The proposed licensing regimes strike a prudent balance among fostering market development, managing risks and protecting investors. They will help realise our vision for building a trusted and sustainable digital asset ecosystem, with a view to establishing Hong Kong as a global hub for digital asset innovation."

The Chief Executive Officer of the SFC, Ms Julia Leung, said, "The significant progress in our VA regulatory framework ensures Hong Kong remains at the global forefront of digital asset market developments by fostering a trusted, competitive and sustainable ecosystem. With an unwavering commitment to responsible innovation, we are laying the foundation for a vibrant yet resilient ecosystem that may bring vast benefits to Hong Kong's financial markets and the broader economy in the long run."

Meanwhile, in response to the feedback received, the FSTB and the SFC also launched a further publicconsultation today on establishing separate licensing regimes for VA advisory and management service providers, instead of covering the relevant VA activities under the licensing regime for VA dealing service providers as originally proposed. This revised regulatory approach will model itself on the regulatory framework applicable to the conventional securities market, and will provide better clarity as regards the scope of activities regulated under different VA licensing regimes. The further consultation will last for one month, ending on January 23, 2026.

The FSTB and the SFC welcome views from the public on the proposed licensing regimes for VA advisory and management service providers. Submissions should be sent by post (24/F, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong Kong) or by email (vadealing-consult@fstb.gov.hk) to the FSTB.

Details of the consultation conclusions, as well as the further public consultation for licensing regimes for VA advisory and management service providers, are available on the webpages of the FSTB and the SFC:

*Consultation Conclusions on Legislative Proposal to Regulate Dealing in VA and Further Public Consultation on Legislative Proposal to Regulate VA Advisory Service Providers and VA Management Service Providers (www.fstb.gov.hk/fsb/en/publication/consult/doc/VAdealing_consultation_conclusion_e.pdf /apps.sfc.hk/edistributionWeb/gateway/EN/consultation/conclusion?refNo=25CP6)

*Consultation Conclusions on Legislative Proposal to Regulate VA Custodian Services (www.fstb.gov.hk/fsb/en/publication/consult/doc/Custodian_consultation_conclusion_e.pdf /apps.sfc.hk/edistributionWeb/gateway/EN/consultation/conclusion?refNo=25CP7)

With broad market support, and taking into account the feedback to be received in the further consultation, the FSTB and the SFC will finalise the legislative proposals for the licensing regimes, with a target of introducing the relevant bill into the Legislative Council in 2026.

Note: "Digital asset" is a general term with a broad scope, covering, among others, "virtual asset", which is a legally defined term under the existing Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).

Source: AI-found images

Online auction of vehicle registration marks to be held from January 8 to 12, 2026

The Transport Department (TD) today (December 24) said that the next online auction of vehicle registration marks (VRMs) will be held from noon on January 8, 2026 (Thursday), to noon on January 12, 2026 (Monday), through the auction platform E-Auction (e-auction.td.gov.hk). Interested bidders can participate in the online auction only after they have successfully registered as E-Auction users.

A spokesman for the TD said, "A total of 220 Ordinary VRMs will be available at this online public auction. The list of VRMs (see Annex) has been uploaded to the E-Auction website. Applicants who have paid a $1,000 deposit to reserve the Ordinary VRM for auction should also register as an E-Auction user in advance in order to participate in the online bidding, including placing the first bid at the opening price of $1,000. Otherwise, the VRMs reserved by them may be bid on by other interested bidders at or above the opening price. Auctions for VRMs with 'HK' or 'XX' as a prefix, special VRMs and personalised VRMs will continue to be carried out through physical auctions by bidding paddles and their announcement arrangements remain unchanged."

Members of the public participating in the online bidding should take note of the following important points:

(1) Bidders should register in advance as an E-Auction user by "iAM Smart+" equipped with the digital signing function; or by using a valid digital certificate and an email address upon completion of identity verification. Registered "iAM Smart" users should provide their Hong Kong identity card number, while non-Hong Kong residents who are not "iAM Smart" users should provide the number of their passport or other identification documents when registering as E-Auction users.

(2) Bidders are required to provide a digital signature to confirm the submission and amount of the bid by using "iAM Smart+" or a valid digital certificate at the time of the first bid of each online bidding session (including setting automatic bids before the auction begins) to comply with the requirements of the Electronic Transactions Ordinance.

(3) If a bid is made in respect of a VRM within the last 10 minutes before the end of the auction, the auction end time for that particular VRM will be automatically extended by another 10 minutes, up to a maximum of 24 hours.

(4) Successful bidders must follow the instructions in the notification email issued by the TD to log in to the E-Auction within 48 hours from issuance of email and complete the follow-up procedures, including:

completing the Purchaser Information for the issuance of the Memorandum of Sale of Registration Mark (Memorandum of Sale); and

making the auction payment online by credit card, Faster Payment System (FPS) or Payment by Phone Service (PPS). Cheque or cash payment is not accepted in the E-Auction.

(5) A VRM can only be assigned to a motor vehicle registered in the name of the purchaser. Relevant information on the Certificate of Incorporation must be provided by the successful bidder in the Purchaser Information of the Memorandum of Sale if the VRM purchased is to be registered under the name of a body corporate.

(6) Successful bidders will receive a notification email around seven working days after payment has been confirmed and can download the Memorandum of Sale from the E-Auction. The purchaser must apply for the VRM to be assigned to a motor vehicle registered in the name of the purchaser within 12 months from the date of issue of the Memorandum of Sale. If the purchaser fails to do so within the 12-month period, in accordance with the statutory provision, the allocation of the VRM will be cancelled and a new allocation will be arranged by the TD without prior notice to the purchaser.

The TD has informed all applicants who have reserved the Ordinary VRMs for this round of auction of the E-Auction arrangements in detail by post. Members of the public may refer to the E-Auction website or watch the tutorial videos for more information. Please call the E-Auction hotline (3583 3980) or email (e-auction-enquiry@td.gov.hk) for enquiries.

Source: AI-found images