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28 July 2026
1. Introduction
On 24 July 2026, The Stock Exchange of Hong Kong Limited (the “Exchange”) (wholly-owned subsidiary of HKEX) published a guidance letter (HKEX-GL122-26) to provide clarity on the potential implications under the Listing Rules for new listing applicants and listed issuers engaging in digital asset-related activities, covering continuing obligations and disclosure requirements.
Against the backdrop of rapid technological innovation in global financial markets, the Exchange has observed a growing number of listed issuers involved in digital asset-related activities or exploring such initiatives, ranging from investments in digital assets and stablecoin issuance to tokenisation and the creation of blockchain-based platforms.
While acknowledging the transformative potential of digital assets to bring tangible benefits to the real economy and financial markets, the Exchange remains committed to safeguarding investor confidence and protecting the interests of the investing public.
2. Definition of “Digital Assets”
The definition of “digital assets” is not exclusive, but the Exchange gave some examples that “digital assets” are defined as assets that:
- are digital representations of value;
- depend primarily on cryptography and distributed ledger technology or similar technologies; and
- can be used for payment or investment purposes or to access goods or services.
Examples include tokenised real-world assets (including traditional financial instruments), stablecoins, and cryptoassets such as Bitcoin. While the Exchange caveated that this definition is used solely to explain Listing Rules implications, we note that such definition is generally consistent with those as seen in other Hong Kong regulatory regimes.
3. Suitability for Listing / Continued Listing
- New Listing Applicants
Companies that primarily adopt an operating model similar to a “digital asset treasury company” (DAT), i.e., their principal business involves buying and holding digital assets, will unlikely be considered suitable for listing under Chapter 8 of the Listing Rules. By contrast, SFC-authorised exchange-traded funds investing in digital assets may be listed under Chapter 20.
- Existing Listed Issuers
Issuers have a continuing obligation to maintain a business that is substantive, viable and sustainable. If an issuer adopts a DAT‑like model, holding digital assets unrelated to its operations, or holding digital assets without any substantive business, it will likely be regarded as lacking sufficient operations under Rule 13.24(1) of the Listing Rules.
- Cash Companies
Issuers whose assets consist wholly or substantially of cash and/or short-term investments are regarded as “cash companies” and are not suitable for listing (see Rule 14.82 of the Listing Rules). Digital assets held for investment purposes will likely fall within the scope of “cash and/or short-term investments”. If an issuer is found to be a cash company, trading in its securities will be suspended.
- Circumvention of New Listing Requirements
Where an issuer acquires a business holding substantial digital assets and its existing principal business becomes immaterial after the transaction, the Exchange may treat the transaction as a reverse takeover, requiring the issuer to comply with all new listing requirements. Similarly, large‑scale issues of new securities for cash to acquire or develop a new business may be viewed as an attempt to circumvent the new listing requirements, and the Exchange may not grant listing approval for the shares to be issued.
4. Notifiable and Connected Transactions
Acquisitions or disposals of digital assets are generally considered transactions under Chapters 14 (Notifiable Transactions) and 14A (Connected Transactions) of the Listing Rules, regardless of whether they are conducted for investment, treasury or distribution purposes.
Issuers must comply with applicable disclosure and shareholder approval requirements based on transaction size and observe the aggregation rules for transactions involving the same type of digital assets conducted within a 12‑month period.
The Exchange reiterated that advance “blanket approvals” without key transaction terms are generally not acceptable, as shareholders would not have sufficient information to make an informed voting decision. Proposals with key terms will be examined cautiously, and those exhibiting abuses or non‑compliance will not be accepted.
A notable clarification from the Exchange is that acquisitions or disposals of digital assets classified as cash or cash equivalents, namely central bank digital currencies (CBDC) or “other regulated digital monetary value that is authorised or prudentially supervised, designed primarily for payment/settlement and redeemable at par in fiat currency”, will not normally be treated as notifiable transactions. Remarkably, the Exchange has confirmed in this Guidance Letter that an example of such digital representation of monetary value in Hong Kong is any stablecoin whose issuance is authorised by a licence granted under the Stablecoins Ordinance (Cap. 656 of the Laws of Hong Kong).
5. Recommended Disclosure
The Exchange stresses that any disclosure relating to digital asset‑related activities must be accurate, complete in all material respects, and not misleading or deceptive. Disclosure is not required solely because an issuer engages in such activities. However, where disclosure is otherwise required under the Listing Rules, other laws or regulations, or made voluntarily, issuers should include the following information (to the extent relevant):
- Description: Detailed description of the activities and underlying operations;
- Strategy: Board explanation of why the proposal is in the interests of the issuer and shareholders, and expected source of funding;
- Expertise: Management’s expertise and experience in managing the proposed activities;
- Risks: Material risks and associated mitigation measures;
- RMIC: Risk management and internal control systems (custody, security, monitoring);
- Compliance: Applicable legal and regulatory requirements and confirmation of compliance; and
- Timeline: Key milestones and expected completion date.
The Exchange also requires additional specific disclosures on:
- Acquisition of digital assets: If integral to business operations, then the issuer shall disclose specific purposes, breakdown of amount and timing of deployment; If held for treasury/investment, then the issuer shall disclose treasury strategy, role of digital assets, investment limits/caps, and source of funds (including external financing).
- Tokenisation of real-world assets: Disclose identity of token issuer, details of underlying assets (ownership, custody), rights attached to tokens (including redeemability), trading arrangements (marketing platform, blockchain used), and other principal terms.
Issuers should avoid making misleading disclosure or creating unrealistic expectations, particularly at preliminary stages, and should refrain from using generic or boilerplate descriptions when explaining rationale and integration of digital assets.
6. Other Listing Rules Implications
- Distribution in Specie
If an issuer proposes to distribute digital assets (including tokenised assets) to shareholders in specie, it must ensure fair and equal treatment of all shareholders. The Exchange will have concerns if the objectives and reasons are unclear, no reasonable cash alternative is offered, certain shareholders are ineligible to receive the distribution, or shareholders cannot readily hold title or realise value from the distributed tokens.
- Continuing Disclosure
When issuing equity securities to fund digital asset acquisitions, the announcement must include the recommended disclosure set out above. Issuers must report on use of proceeds in subsequent annual reports, including details of digital assets acquired and their purposes. If a particular digital asset holding represents 5% or more of the issuer’s total assets at year‑end, the annual report disclosure requirements for significant investments apply.
7. RMIC
Issuers are reminded to establish and maintain adequate risk management and internal control (RMIC) systems. For digital asset‑related activities, appropriate RMIC measures commensurate with the nature, scale and complexity of the activities should be implemented, covering:
- Compliance with applicable laws and regulations (Listing Rules, SFC/HKMA requirements, AML/CTF, etc.);
- Delegation of supervision to designated staff with necessary expertise, and setting approval thresholds and maximum risk exposure;
- Due diligence and ongoing monitoring of counterparties and service providers;
- Comprehensive security measures (custodian/wallet arrangements, secure storage of private keys, fraud/collusion controls, backup to prevent single points of failure); and
- Processes to identify and escalate material issues to the board/management, including procedures for engaging professional advisers where appropriate.
Conclusion
We appreciate the Exchange’s clarification on its stance in relation to digital assets. As the classification of digital assets continues to crystallise and gain broader acceptance, the Listing Rules should be applied consistently with reference to such classifications. While there is indeed a difference in how the Listing Rules treat digital assets in general compared to CBDCs and stablecoins specifically, this distinction is understandable given the latter’s “fiat currency” nature. That said, in view of digital assets’ agility and unique characteristics, appropriate risk management and internal control measures are indeed necessary. The Exchange’s clarity on digital assets is a positive development, and we are confident it will help foster greater innovation and confidence in Hong Kong’s digital asset ecosystem.
Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.
This news update is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.