SFC revises authorised VA fund circular to permit direct spot virtual-asset investment and staking
Management companies, custodians, and participating dealers of SFC-authorised VA funds must meet revised eligibility, custody, valuation, and disclosure requirements, and obtain prior SFC consultation and approval before exceeding 10% VA exposure or engaging in staking
SFC
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Change
On 27 May 2026, the SFC issued a revised circular (superseding the 7 April 2025 version) setting the requirements for authorising investment funds with virtual-asset exposure above 10% of NAV for public offering in Hong Kong. It permits SFC-authorised funds to invest directly in spot VA tokens accessible on SFC-licensed VATPs and, under the SFC's ASPIRe roadmap, opens the door to staking and other VA-related activities — both gated by eligibility, custody, valuation, disclosure, and prior-approval conditions.
Why it matters
The revised circular replaces the 7 April 2025 framework and broadens what SFC-authorised funds may do: direct spot VA investment (previously the regime centred on futures-based and indirect exposure) and, newly, staking and other VA-related activities under the ASPIRe roadmap. Both are conditional. Eligible VA is limited to tokens accessible to the Hong Kong public on SFC-licensed VATPs; futures are allowed only on conventional regulated exchanges; fund-level leverage is prohibited. Spot VA transactions must run through SFC-licensed VATPs or HKMA-compliant AIs, with participating dealers required to be SFC-licensed corporations or registered institutions. Custody is tightly specified — delegation only to SFC-licensed VATPs, HKMA-standard AIs, or SFC-acceptable entities; asset segregation; predominant cold-wallet storage; and seeds/private keys stored securely in Hong Kong with multi-signature and key-sharding. Valuation must follow an index-based approach. KFS and offering documents must carry upfront risk disclosure (price, custody, cybersecurity, fork risk for spot; roll cost and operational risk for futures). The staking framework imposes its own controls, disclosure, investor-notice, and reporting obligations. Across all three triggers — seeking authorisation above 10% NAV exposure, an existing authorised fund crossing 10%, or an authorised VA fund entering staking — prior SFC consultation and approval are mandatory. Relevant Stablecoins and tokenised deposits are carved out to the UT Code FAQs, and UCITS/MRF schemes are exempt except for the prior-approval requirement.
Implications
- — Management companies of SFC-authorised VA funds must meet the eligibility bar — a good regulatory-compliance track record and at least one competent staff member experienced in VA management — and accept additional terms and conditions imposed by the SFC's Intermediaries Division before authorisation; funds without the requisite staffing and track record cannot be authorised.
- — Fund management companies must obtain prior SFC consultation and approval before seeking authorisation for more than 10% NAV VA exposure, before an existing authorised fund obtains more than 10% VA exposure, or before an authorised VA fund engages in staking or other VA-related activities — proceeding without prior consultation and approval is non-compliant.
- — Trustees and custodians of SFC-authorised VA funds must restrict VA custody delegation to SFC-licensed VATPs, HKMA-standard AIs, or other SFC-acceptable entities, and enforce the custody controls — asset segregation, predominant cold-wallet storage, minimised hot-wallet exposure, and seeds/private keys stored securely in Hong Kong with multi-signature and key-sharding and backups; non-conforming custody arrangements disqualify the fund.
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