The Hong Kong Securities and Futures Commission (SFC) issued a circular on December 11 indicating that with the proper licensure, financial intermediaries will be allowed to offer certain American-issued bitcoin futures on the Hong Kong market.
The announcement follows recent decisions by the Chicago Board Options Exchange and the CME Group, of which the Chicago Mercantile Exchange is a part, to introduce bitcoin futures to the American market. It reads:
"Bitcoin Futures have been or will soon be launched by certain well-established futures and commodities exchanges in the United States which are regulated by the U.S. Commodity Futures Trading Commission and authorised by the [SFC] to provide automated trading services. Hong Kong investors may be able to trade in Bitcoin Futures through an intermediary which is a member of these exchanges."
Firms can attain this authorization by acquiring a Type 2 license, and may seek other licenses that would permit them to market "a fund investing in Bitcoin Futures," as well as to manage such a fund or offer "advisory services in relation to Bitcoin Futures."
These requirements apply to all firms and parties whose "business activities target the Hong Kong public," regardless of where the entity or actor is based.
According to the document, the futures in question meet the Securities and Futures Ordinance's definition of "futures contracts" in spite of the fact that the law does not regulate their underlying asset.
Predictably, perhaps, the announcement also warns that parties trading bitcoin futures "without a relevant licence or authorisation from the SFC may be committing a criminal offence" and that "Investors should understand the risks of using [unlicensed] services, as in the past some cryptocurrency exchanges have collapsed or been hacked and client assets stolen or misappropriated."
As far as ETHNews is aware, the Chinese government has yet to make any statements on cryptocurrency futures, but considering the "one country, two systems" scheme by which the two polities are structured, it seems likely that Chinese authorities are monitoring this development.
On September 5, the SFC declared that certain cryptocurrency tokens meet its definition of securities.
On October 25, the Hong Kong Monetary Authority and the Monetary Authority of Singapore unveiled plans to connect their blockchain-backed trade finance platforms in an effort to combat fraud.