Hong Kong SFC Issues Two Digital Asset Circulars Expanding VA Dealing Rules, February 2026

On 11 February 2026, the Securities and Futures Commission of Hong Kong (SFC) published two circulars under the Intermediaries Division: Circular SFO/IS/005/2026, governing virtual asset (VA) financing and shared order book access for licensed VA brokers, and Circular SFO/IS/006/2026, setting conditions for virtual asset trading platform operators (VATP operators) to accept affiliated market makers (AFMMs). Both circulars are operative immediately and form part of the SFC's ASPIRe roadmap—a five-pillar policy agenda to develop Hong Kong's virtual asset market. Neither circular requires primary legislation; both impose conditions directly on existing licences under the Securities and Futures Ordinance (Cap. 571).

Circular SFO/IS/005/2026 amends paragraph 4.4 of the Terms and Conditions for Licensed Corporations or Registered Institutions Providing Virtual Asset Dealing Services under an Omnibus Account Arrangement, which previously barred VA brokers from extending credit to clients for VA acquisition. Under the new regime, a VA broker engaged in securities margin financing may extend VA financing to eligible margin clients, provided the credit rests on: (a) the client's assessed financial capability; and (b) securities collateral plus—if elected—VA collateral limited to bitcoin and ether, subject to a mandatory haircut of 60% or more on the market value of that collateral. The circular also confirms VA brokers may conduct agency trading for retail clients on Shared Order Books—integrated order books connecting licensed Hong Kong VATPs with global affiliate platforms—after completing specified disclosure and risk-assessment steps. Circular SFO/IS/006/2026 permits VATP operators to allow an affiliated company to conduct market making on the operator's platform. Under paragraph 13.3 of the Guidelines for Virtual Asset Trading Platform Operators, group companies were previously barred from proprietary trading through a VATP except by SFC case-by-case permission. To use the AFMM permission, a Platform Operator must: (a) notify the SFC in writing; (b) submit an independent professional firm's report confirming compliance with the Terms and Conditions for an AFMM; and (c) ensure client orders hold priority over AFMM orders at the same price level, with a designated Responsible Officer or Manager-in-Charge overseeing conflicts-of-interest management.

For VA brokers operating in Hong Kong under an omnibus account arrangement, Circular SFO/IS/005/2026 creates a new revenue opportunity: margin lending secured by VA collateral. Eligible clients must already be securities margin financing clients; brokers may not expand credit limits solely because VA financing is now available. VA collateral is limited to bitcoin and ether, both subject to at least a 60% haircut. Before the SFC revises capital requirements, VA collateral carries a 100% haircut under the Securities and Futures (Financial Resources) Rules for capital adequacy purposes. Brokers must monitor VA collateral values in real time and maintain contingency plans for VATP outages. For VATP operators, Circular SFO/IS/006/2026 allows affiliated market makers to participate on their platforms for the first time without a case-by-case SFC approval, provided the full notification and compliance package is delivered. This measure targets the low liquidity levels on licensed Hong Kong VATPs at this stage of digital asset market development.

Two open matters require attention. First, the SFC stated it will launch a consultation in due course on capital requirements for VA-related activities, including VA financing; until new rules take effect, VA collateral bears a 100% capital haircut under existing rules. Second, retail client access to Shared Order Books requires explicit client consent after prominent disclosure of cross-jurisdictional risks—including that client protections in overseas jurisdictions may be lower than in Hong Kong. The Terms and Conditions will be revised to reflect both relaxations, but no firm revision date was given in the circulars.

Source: Securities and Futures Commission, Circular SFO/IS/005/2026, "Circular on licensed corporations providing virtual asset dealing services (1) to offer financing for virtual asset dealing and access to shared order book, and (2) to safeguard client virtual assets relating to withdrawals," 11 Feb 2026, https://apps.sfc.hk/edistributionWeb/gateway/EN/circular/intermediaries/supervision/doc?refNo=26EC5; Circular SFO/IS/006/2026, "Circular on permitting virtual asset trading platform operators to accept affiliated market makers," 11 Feb 2026, https://apps.sfc.hk/edistributionWeb/gateway/EN/circular/intermediaries/supervision/doc?refNo=26EC6. Confirmed current as of 19 March 2026.

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