Circular on transitional arrangements of the new licensing regime for virtual asset trading platforms

The Securities and Futures Commission of Hong Kong, SFC, has published a [Circular]() to provide some transitional arrangements for virtual asset service providers (VASPs) and virtual asset trading platforms (VATPs) with respect to their registration requirements pursuant to the new Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance 2022.
Specifically, the SFC notes that VATPs and VASPs providing trading or trading-related services in non-security tokens BEFORE June 1, 2023 – the effective date of the new registration requirement – will be granted additional time to comply with their registration requirements as follows:
Those VATPs and VASPs with a „genuine business and presence“ in Hong Kong before the effective date may continue to provide their services up to May 31, 2024. The evaluation criteria for „genuine business and presence“ are outlined in the circular (e.g. incorporated in Hong Kong, employment of Hong Kong staff, etc.). Firms qualifying for this transitional arrangements MUST apply for registration by February 29, 2024 via WINGS, the SFC’s online platform for submitting SFC-mandated documents and forms. Additionally, the SFC must have confirmed such application and not rejected via a so-called „no-deeming notice“ in order to be able to continue operation until registration has been officially granted by the regulator. If a „no-deeming notice“ has been issued, e.g. in case the SFC finds that not all requirements have been met for registration, the firm must prepare to close down its business by May 31, 2024.
Please note that the transitional arrangement does NOT apply to firms and individuals providing trading or trading-related services in security tokens. Likewise, firms and individuals that have operated before June 1, 2023, but are NOT willing to apply for registration, are expected to wind-down their business and no longer offer their services to Hong Kong investors beginning June 1, 2023. Furthermore, VASPs and VATPs that have offered services in Hong Kong before June 1, 2023, but are NOT Hong Kong-based, do NOT qualify for the arrangement.