Hong Kong Approves Bitcoin and Ethereum ETFs
15 Apr, 2024 ● Crypto News
Hong Kong has recently authorized the launch of spot exchange-traded funds (ETFs) for Bitcoin and Ether, marking a significant development in its financial markets.
According to a report by Reuters on April 15, the Hong Kong Securities and Futures Commission (SFC) conditionally approved the first spot BTC and ETH ETFs.
These ETFs are set to be launched by at least three offshore Chinese asset managers, including the Hong Kong units of Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC).
Bosera is partnering with Hong Kong-based HashKey Capital for its spot crypto ETFs, while OSL Digital Securities, a licensed digital asset platform in Hong Kong, will serve as the sub-custodian for both ChinaAMC and Harvest.
The SFC grants a conditional authorization letter to ETF applications that generally meet its criteria, pending the fulfillment of various conditions such as fee payments, document submissions, and obtaining listing approval from the Hong Kong Stock Exchange (HKEX).
Notably, these newly approved spot Bitcoin and Ether ETFs will operate on an in-kind basis, where new ETF shares can be created using BTC and ETH, contrary to the cash-create redemption model used in the U.S.
This in-kind subscription model is hailed as an innovation by Patrick Pan, the chairman and CEO of OSL.
He highlighted that this mechanism boosts market liquidity by allowing direct exchanges of assets for ETF shares, minimizing dependence on cash settlements and supporting seamless trading.
Pan also noted that while the approvals are a major step forward, indicating that the vetting processes are nearly complete, specific launch dates for the ETFs are still to be determined.
The initiation of these ETFs is anticipated to significantly enhance capital inflows into Hong Kong's digital asset market.
The approval on April 15 follows expectations that the SFC would approve the first batch of spot Bitcoin ETFs on that date. HKEX is expected to take approximately two weeks to finalize the listing procedures and other necessary arrangements following the SFC’s approval.
Sources:
https://cointelegraph.com/news/hong-kong-approves-bitcoin-ether-etfs
