The Hong Kong Securities and Futures Professionals Association (HKSFPA) stated on July 6 that after a meeting with regulatory representatives including Joseph Chan, Under Secretary for Financial Services and the Treasury, and Keith Yip, Executive Director of the Intermediaries Division of the Securities and Futures Commission (SFC), the SFC pledged to advance the separation of the "Certified Virtual Asset Professional" (CVAP) examination and its course, optimize study materials, and lower examination fees to align with those of the existing Paper 2 and Paper 3 tests.
SFC Pledges Separation of CVAP Exam and Course, Fee Reduction
According to HKSFPA, the SFC has communicated with the Hong Kong Securities and Investment Institute (HKSI) and pledged to implement the following CVAP examination reforms: separation of the exam and course, allowing candidates to take the exam directly without mandatory attendance; the standalone exam will provide official study materials; and examination fees will be reduced to match those of the current Paper 2 and Paper 3 tests.
HKSFPA also noted that its President asked during the meeting whether the CVAP examination system had been formally authorized by the SFC Board. The SFC representatives did not give a direct response regarding board authorization, only emphasizing that the exam is conducted under the statutory powers of the Securities and Futures Ordinance. HKSFPA believes that for an examination system affecting the significant professional rights of licensees, the administrative decision-making process should maintain a high degree of transparency.
New Regulations Cancel 10% Minimum Exemption and Take Immediate Effect
According to HKSFPA, the meeting discussed several specific policy changes, including the cancellation of the previous 10% minimum exemption for virtual asset management, and the immediate effect of new regulations without a transition period. Details regarding entry allocation remain to be clarified.
HKSFPA representatives stated bluntly at the meeting that some current regulatory provisions are overly principle-based and lack specific operational guidance, placing institutions preparing to enter or already involved in virtual asset businesses under immense compliance and operational adjustment pressure. HKSFPA also urged regulators to flexibly adjust practical requirements while ensuring safety. Specific concerns regarding VATP (Virtual Asset Trading Platforms) are as follows:
Hardware Encryption Technology Diversification: Promote diversified options for hardware encryption technology.
Hot/Cold Wallet Ratio: Review the requirement for hot/cold wallet ratios.
Insurance Coverage: Review insurance coverage requirements.
On-Chain Transfer Arrangements: Optimize on-chain transfer operational arrangements.
HKSFPA Calls for Clarification on the Boundary Between Technology Services and Regulated Activities
According to HKSFPA, the association requested regulators to clearly define the boundary between technology services and regulated activities. If an institution does not handle client assets or charge commissions or service fees, it should be clarified whether this constitutes a regulated activity, to prevent pure technology service providers from bearing unnecessary licensing burdens.
HKSFPA urged regulators to provide classification guidance for different business models (technology access, system development, transaction support, advisory services, etc.). Additionally, HKSFPA expressed concerns about MSO (Money Service Operator) licenses: some companies hold only an MSO license issued by Hong Kong Customs but are effectively engaged in large-scale virtual asset payments. The association urged authorities to clarify the division of responsibilities among regulatory bodies and announce policy directions and timelines as soon as possible.
Retail Sector Limited to Five Spot Currency Pairs, Including BTC, and Only Allows Long Positions
According to HKSFPA, Hong Kong's retail sector is currently mainly restricted to five spot currency pairs (BTC, ETH, AVAX, LINK, SOL) and only allows long positions, lacking risk hedging tools. HKSFPA urged the authorities to expedite the approval of related derivatives to enhance Hong Kong's international competitiveness.
Furthermore, the industry is concerned about tokenized assets involving cross-market underlying assets such as stocks and commodities, particularly regarding the compliance basis for price discovery mechanisms, overseas data sources, and trading session start/end times. The industry expects regulators to provide clear guidance on these matters.
HKSFPA also suggested that the SFC establish a clearer approval timeline and phased reference framework for the surge in VA license applications, enabling companies to accurately plan resources. The SFC indicated during the meeting that it is currently facing recruitment difficulties and staffing shortages.
Frequently Asked Questions
What specific measures has the SFC pledged for the optimization of the CVAP exam?
According to HKSFPA, the SFC pledged to advance the separation of the CVAP exam and course (candidates can take the exam directly without mandatory attendance), provide official study materials for the standalone exam, and lower examination fees to align with those of the existing Paper 2 and Paper 3 tests.
What demands has HKSFPA raised regarding the boundary between technology services and regulated activities?
According to HKSFPA, the association requested regulators to clearly define whether activities constitute regulated activities if an institution does not handle client assets or charge commissions or service fees, and urged the provision of classification guidance for different business models including technology access, system development, transaction support, and advisory services.
What are the current restrictions on retail virtual asset trading in Hong Kong?
According to HKSFPA, Hong Kong's retail sector is currently mainly restricted to five spot currency pairs (BTC, ETH, AVAX, LINK, SOL) and only allows long positions, lacking risk hedging tools. HKSFPA urged the authorities to expedite the approval of related derivatives.
