Hong Kong SFC Plans to Introduce Regulatory Framework for Perpetual Contracts, Limited to Institutional Investors

Odaily News: On February 11th, at the Consensus Hong Kong conference, Julia Leung, CEO of the Hong Kong Securities and Futures Commission (SFC), stated that the regulator will release a "high-level framework" allowing licensed trading platforms to offer perpetual contract products.

Leung pointed out that initially, such products will only be open to institutional investors and not to retail clients. The related framework will focus on risk management, requiring platforms to have robust risk control capabilities and ensuring that the trading mechanisms are fair to clients.

Furthermore, the Hong Kong SFC will also permit brokers to provide financing services to clients with good credit standing, with eligible collateral including both securities and virtual assets. Considering the high volatility of virtual assets, initially only Bitcoin (BTC) and Ethereum (ETH) will be eligible as collateral.

Regarding market-making activities, platforms engaging in such services must establish independent market-making departments and implement strict conflict of interest management mechanisms. Leung stated that the above measures are part of the SFC's 2025 roadmap to promote the development of the local crypto market, aiming to allow compliant institutions to offer a more diverse range of products and services.