Hong Kong’s SFC Sets 2024-2026 Agenda: Emphasis on Tokenization and Virtual Asset Innovation

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Hong Kong’s Securities and Futures Commission (SFC) recently published its strategic priorities for the years 2024 to 2026. This document outlines a comprehensive strategy aimed at advancing Hong Kong’s securities markets, mitigating risks and improving investor protection against the backdrop of a dynamic global financial landscape.

Key areas of focus

SFC’s strategic plan is anchored in four key areas:

Maintaining market resilience: The SFC aims to strengthen Hong Kong’s financial market infrastructure to support sustainable growth. This includes addressing emerging risks, improving risk management among market intermediaries and improving enforcement tools to detect and counter misconduct.

Increasing global competitiveness: Hong Kong is set to use its unique position as a gateway to mainland China, aiming to expand its investor base, improve IPO fundraising opportunities and improve market liquidity. This approach is in line with the SFC’s aim to strengthen Hong Kong’s role in renminbi business and risk management, contributing to national development and financial security.

Embracing innovation and tokenization: The SFC plans to improve Hong Kong’s position in virtual assets, tokenization and sustainable finance. Key initiatives include improving the regulatory framework for virtual asset trading platforms and expanding the tokenization of traditional products to improve investor protection.

Enhancing institutional resilience and effectiveness: The SFC focuses on improving operational efficiency, cyber resilience and ensuring adequate financial resources to effectively carry out its regulatory responsibilities.

The views of the chairman and CEO

Tim Lui, Chairman of the SFC, emphasized the Commission’s readiness to respond decisively to new regulatory challenges both locally and internationally, shaping market developments. Julia Leung, Chief Executive, emphasized the SFC’s commitment to protecting investors from financial crime and achieving positive regulatory outcomes using a wide range of tools and resources.

Technological transformation

A significant part of SFC’s strategy involves embracing technology and Environmental, Social and Governance (ESG) initiatives. This includes fostering a responsible fintech ecosystem and combating greenwashing, while nurturing talent for sustainable finance.

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Conclusion

The SFC’s Strategic Priorities 2024-2026 mark a key step in aligning Hong Kong’s financial sector with global trends and challenges. By focusing on sustainability, competitiveness, innovation and efficiency, the SFC is well positioned to enhance Hong Kong’s status as a premier global financial centre, ensuring market integrity and investor protection.

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