Hong Kong SFC Approves First Secondary Trading of Tokenised Funds

Secondary trading of two SFC-authorised tokenised money market funds began on 26 October 2026 on a Hong Kong-licensed virtual asset trading platform — the first arrangement of its kind anywhere, according to the Securities and Futures Commission. Trading runs around the clock.

The approval follows a framework the SFC introduced in April 2026 to pilot secondary trading of tokenised SFC-authorised funds on SFC-licensed VATPs. The framework sits on top of two existing regimes: the SFC's rules for exchange traded funds and its licensing regime for virtual asset trading platforms. A circular set out requirements covering the operation of the trading channel, fair pricing, liquidity provision and disclosure.

What does the approval actually change?

Two points matter for desks tracking Asian market structure.

First, tokenised fund units now have a secondary venue, not just a primary subscription and redemption channel. Investors can sell tokenised money market funds on a VATP on a 24/7 basis. That removes the traditional fund dealing-cycle constraint for these two products, though only for holders willing to access a licensed virtual asset platform.

Second, the SFC has tied the pilot to settlement infrastructure. Tokenised public funds could leverage tokenised deposit capabilities developed with the Hong Kong Monetary Authority under Project Ensemble. The SFC's stated logic: interaction between tokenised funds and tokenised money on digital rails could support more efficient trade settlement and asset mobility. Investors could transfer trading proceeds instantly elsewhere for other investment opportunities and use cases.

The word to watch in that formulation is "could." No settlement volumes, latency figures or participation counts appear in the SFC's announcement. The commission describes capability, not measured throughput.

What did the SFC say?

Ms Elisa Ng, the SFC's Executive Director of Investment Products, said: "Secondary trading of tokenised money market funds marks an important milestone in the SFC's ongoing effort in advancing Hong Kong's digital asset development. It puts the SFC's regulatory framework through its paces and adds an important building block – 24/7 trading capability – to Hong Kong's evolving tokenisation ecosystem."

Ng added: "We will continue to strengthen Hong Kong's position as a pioneer in tokenisation by facilitating responsible innovation while safeguarding investors."

Both statements are commitments to process, not results. "Through its paces" is an acknowledgement that the framework is being tested in live conditions for the first time — with two money market funds, the least volatile instrument class available.

What is mandated, what is asserted?

Mandated and in force:

• The April 2026 regulatory framework for secondary trading of tokenised funds on licensed VATPs, defined in an SFC circular.
• Circular requirements on trading channel operation, fair pricing, liquidity provision and disclosure.
• Live secondary trading of the two tokenised money market funds from 26 October 2026, on an around-the-clock basis.

Asserted, without figures:

• That tokenised fund and tokenised deposit interaction will produce more efficient settlement and asset mobility.
• That instant transfer of trading proceeds will enhance the utility of Hong Kong's tokenised ecosystem.

The SFC did not name the two funds, the platform, the spreads achieved, or any volume targets. Firms evaluating execution quality on the new channel will need venue-level data the announcement does not carry.

What comes next?

The first batch covers only tokenised money market funds. The SFC said it will closely monitor the relevant trading activities and consider broadening the product scope over time, after taking into account market developments and experience gained — language that leaves both the timetable and the next asset class unspecified. Broader tokenised fund secondary trading in Hong Kong will depend on what the monitoring of this two-fund pilot shows.