In May 2026, the Financial Services and the Treasury Bureau and the Securities and Futures Commission jointly published their consultation conclusions on the legislative proposal to regulate virtual asset advisory service providers and virtual asset management service providers in Hong Kong. The conclusions follow a one-month consultation, conducted on a further consultation paper issued on 24 December 2025, which closed on 23 January 2026 and drew 51 submissions from market participants, industry associations, professional bodies and individuals. The Bureau and the Commission report that the market generally supports the policy objectives and key proposals. On that basis, they will finalise the legislative proposals to establish the two regimes under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) and intend to introduce a bill into the Legislative Council in 2026. For advisers and asset managers with any exposure to virtual assets, the conclusions set out the shape of a licensing perimeter that is now close to legislative form.
The organising principle: same activity, same risks, same regulation
The conclusions are governed throughout by a single stated principle, that of "same activity, same risks, same regulation." The practical effect is that the two new regimes are modelled closely on existing regulated activities under the Securities and Futures Ordinance: the virtual asset advisory regime tracks Type 4 regulated activity (advising on securities), and the virtual asset management regime tracks Type 9 regulated activity (asset management). The Bureau and the Commission return to this parity repeatedly, applying it to scope, regulatory requirements, capital and fees alike. The design intent is that a firm advising on or managing virtual assets should face requirements equivalent to those it would face conducting the analogous securities business, no lighter and no heavier.
For the advisory regime, the conclusions adopt the proposed scope of "advising on VA," capturing any person carrying on a business in Hong Kong of giving advice on whether, which, when, or on what terms virtual assets should be acquired or disposed of, or issuing analyses or reports to facilitate such decisions. The Commission is explicit that substance governs over form. In its words, consideration must be given "to the substance of the activity rather than how it is described, labelled or disguised," with the paper expressly naming "educational" content, research, general commentary and "trading signals" as labels that will not shield an activity that is, in substance, advice. Mirror trading and copy trading are brought within the advisory regime on the same reasoning, and where they involve discretionary execution, they engage the management regime as well.
The regimes are also stated to be technology neutral. Providing a tool that generates specific virtual asset recommendations, or a robo-adviser that rebalances a portfolio on a discretionary basis, falls within scope; a tool that merely filters generic factual information to assist a user's self-directed research does not.
The management regime and the deliberate absence of a threshold
The virtual asset management regime adopts the proposed scope of managing a portfolio of virtual assets for another person where the manager holds discretionary power over investment decisions, again mirroring Type 9 activity under the Ordinance. The most consequential single decision in the conclusions sits here: the Bureau and the Commission confirm they will not set a de minimis threshold. Their stated reasons are to uphold regulatory standards and investor protection and to prevent regulatory arbitrage.
The consequence repays close attention by any Type 9 manager with even incidental virtual asset exposure. The conclusions state plainly that intermediaries licensed for Type 9 activity which currently manage portfolios with virtual asset exposure below the former de minimis threshold will be required to obtain a licence or registration under the new regime, and will be held to the same standards as those previously above it. The boundary that had allowed limited exposure without the virtual asset terms and conditions is, on these conclusions, to be removed. The paper does, however, draw the asset-type line carefully: managing portfolios invested in products that merely reference virtual assets, such as virtual asset spot or futures exchange-traded funds, or in companies that trade virtual assets proprietarily, or funds of funds, generally falls within Type 9 rather than the new regime, and managing a portfolio of both virtual assets and such referencing products would require both a virtual asset management licence and a Type 9 licence.
Capital, custody and the stablecoin exemption
The financial resources requirements follow the parity principle precisely. For both advisory and management providers, the conclusions impose a baseline of a minimum required liquid capital of HK$100,000 for those not holding client assets, and a minimum paid-up share capital of HK$5 million together with a minimum required liquid capital of HK$3 million in any other case. A corporation dually licensed under the Ordinance and the new regime is not to face doubled capital requirements; instead, the highest applicable requirement among its licensed activities applies.
On custody, the conclusions resolve a contested question in favour of flexibility. Rather than requiring private fund virtual assets to be held only with SFC-regulated custodians, the Bureau and the Commission accept that private funds should retain flexibility to appoint qualified custodians globally, mirroring the current Type 9 treatment and preserving parity between traditional and virtual asset fund management. Where no qualified custodian supports a particular token, limited self-custody will be permitted subject to robust prescribed requirements, with the reminder that holding client assets attracts the higher capital threshold and that custody activity may itself cross into regulated custodian services.
A point of direct connection to the wider Hong Kong regime deserves emphasis. The conclusions recognise that specified stablecoins, as defined under section 4 of the Stablecoins Ordinance and issued by persons licensed by the Hong Kong Monetary Authority, differ in nature and risk from other virtual assets. Accordingly, the Commission will introduce exemptions for SFC-licensed or registered intermediaries from obtaining the relevant virtual asset service provider licences in relation to their Ordinance activities involving such stablecoins. The advisory and management regimes are thus being calibrated to interlock with the stablecoin licensing regime rather than to overlap it.
The hard commencement date and what it invites firms to do now
Perhaps the most operationally significant feature of the conclusions is the decision on transition. The Bureau and the Commission state that they do not plan to grant a deeming arrangement to existing advisory or management service providers, reasoning that deeming could create confusion over regulatory status and may not be optimal for investor protection. The regimes will instead take full effect on the commencement date of the relevant statutory provisions. The Government and the Commission will consider an appropriate commencement date that allows market participants time to adjust, and an expedited approval process is promised for intermediaries already providing these services under existing terms and conditions.
The conclusions are nonetheless direct about the consequence of inaction. Providers that do not contact the Commission or the Monetary Authority for pre-application "may suffer undue business disruptions, as they will have to stop operations on the commencement date." For firms currently advising on or managing virtual assets, this language repays attention now rather than on commencement. Early engagement with the regulator, through the pre-application channel the conclusions identify, is the course the document itself encourages, and Type 9 managers presently below the former threshold may note that staff experience accumulated in managing the virtual asset portion of their portfolios will count towards the experience requirements under the new regime. Those that do not intend to seek a licence are urged to plan an orderly wind-down of their virtual asset management business before commencement.
Two further features broaden the regime's reach. First, the conclusions confirm an extraterritorial dimension: modelled on the Ordinance regimes, the new regimes will prohibit any person, whether in Hong Kong or elsewhere, from actively marketing these virtual asset services to the Hong Kong public unless licensed, with further guidance on the meaning of "actively market" to follow. Overseas providers are, in the paper's terms, "firmly reminded" of this. Second, the conclusions flag the rising significance of "finfluencers." Rather than addressing them within this regime, the Commission has been engaging the market since September 2025 and will conduct a separate holistic review of both the Ordinance regimes and the proposed virtual asset regimes, consulting further if a comprehensive framework encompassing finfluencers is proposed.
Significance
The conclusions move Hong Kong's virtual asset regulatory architecture close to completion. With the trading platform regime operational since June 2023, and dealing and custodian regimes consulted upon in parallel, the advisory and management regimes are presented as the natural next step toward a comprehensive licensing structure spanning the principal virtual asset activities under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The defining choices are the parity principle, which imports the established Type 4 and Type 9 frameworks rather than inventing new ones; the refusal of a de minimis threshold, which widens the net to managers with even incidental exposure; and the rejection of deeming in favour of a hard commencement date, which places the onus on firms to engage early or wind down. The legislative proposals are now to be finalised and a bill introduced into the Legislative Council in 2026, with consultation on the detailed regulatory requirements to follow.
(Source: https://apps.sfc.hk/edistributionWeb/api/consultation/conclusion?lang=EN&refNo=25CP12)
