HKMA and SFC ease investor-protection rules for Registered Institutions' stablecoin-only services
Hong Kong RIs running stablecoin-only services no longer face the VA-knowledge test, high-liquidity rule or PI-only restriction.
HKMA
·
Change
On 27 May 2026, the HKMA and SFC issued joint guidance creating a lighter regulatory regime for Registered Institutions' Relevant Stablecoin activities. The VA-knowledge test, client VA-exposure limit, high-liquidity rule, and PI-only restrictions no longer apply to stablecoin-only services; in return, RIs must disclose stabilisation and redemption mechanics and notify the HKMA and SFC in advance.
Why it matters
Relevant Stablecoins — issued under the Stablecoins Ordinance and pegged to fiat — are now treated as a distinct investor-protection class from other virtual assets. For stablecoin-only dealing, advisory, and asset-management services, the VA-knowledge test, exposure limits, high-liquidity rule, and Type 1/Type 4 client restrictions no longer apply, and Type 9 registration is not required for portfolios holding only Relevant Stablecoins. For distribution of stablecoin-related products, the automatic complex-product presumption is removed, lifting the PI-only restriction, knowledge test, and warning-statement requirements for non-complex products. In return, RIs must disclose stabilisation and redemption mechanics, notify HKMA and SFC in advance of any stablecoin activities or material changes, and comply with the Appendix A1/A2 terms imposed as SFC registration conditions. The lighter regime applies only within the stablecoin-only perimeter — any non-stablecoin VA introduced into the account reinstates the full Joint Circular requirements.
Implications
- — RIs offering stablecoin-only dealing, advisory or asset-management services must keep stablecoin-only client accounts strictly separate from accounts containing other VAs — the lighter regime applies only within the stablecoin-only perimeter, and any non-stablecoin VA in the account reinstates the full Joint Circular requirements. RIs must also disclose stabilisation/redemption mechanics for the Relevant Stablecoins they deal in.
- — RIs distributing stablecoin-related products must classify each product under the SFC's general complex/non-complex framework rather than the prior automatic VA-complexity presumption — PI-only, the knowledge test and warning statements then lift for non-complex products, while suitability and warnings continue for products complex on their own facts.
- — RIs entering or materially changing stablecoin activities must notify HKMA and SFC in advance and comply with the Appendix A1/A2 terms — these are conditions of registration, not optional guidance.
See full brief
Use 1 free preview to unlock implications, who’s affected, what to watch, and Clarify for this brief.
2 free previews left this month · Resets 1 Jun
Source