We are pleased to announce that our Partner, Kenneth Leung, has been named in the Asian Legal Business (ALB) Hong Kong Rising Stars 2026, recognising outstanding young legal practitioners in Hong Kong.

The annual ALB Hong Kong Rising Stars list recognises the achievements of the next generation of legal talent under the age of 40. Candidates are considered on the strength and complexity of their work, client feedback and their contribution to the wider legal profession.

Kenneth is a Partner in our Litigation & Dispute Resolution and Regulatory Enforcement & Compliance practices. He has extensive experience in complex commercial disputes and regulatory matters, with a particular focus on advising and representing corporations and financial institutions in contentious regulatory investigations, enforcement proceedings and related advisory matters.

Kenneth’s inclusion in the ALB Hong Kong Rising Stars 2026 recognises his strong legal and commercial judgement, professionalism and commitment to client service, as well as his expertise in navigating complex disputes and regulatory matters.

View the full-list of the ALB HK Rising Stars 2026 here.

Please contact our Partner Kenneth Leung for any enquiries or further information.

China’s securities regulator has fired its most significant shot yet in a years-long campaign against unlicensed cross-border brokerages. On 22 May 2026, the China Securities Regulatory Commission (“CSRC”), acting jointly with seven other government departments, announced it would impose firm and decisive enforcement action against (坚决予以打击)[1] three of the region’s most prominent online brokers:

• Tiger Brokers (NZ) Limited;
• Futu Securities International (Hong Kong) Limited; and
• Longbridge Securities (Hong Kong) Limited.

These coordinated actions — resulting in proposed penalties exceeding RMB 2.3 billion (~HK$2.67 billion), a mandatory two-year wind-down of mainland-facing operations, and a parallel Hong Kong regulatory response from the Securities and Futures Commission (“SFC”) — underscore Beijing’s determination to close unlicensed cross-border brokerage channels and reassert control over cross-border capital flows.

In this newsletter, our Regulatory Enforcement and Compliance team provides an overview of the CSRC’s findings, the mechanics of the rectification scheme, the SFC’s parallel action, and the critical takeaways for brokers, asset managers, and fintech platforms operating across the Hong Kong–Mainland border.

1. CSRC’s position

On 22 May 2026, the CSRC announced it would impose firm and decisive enforcement action against on Tiger Brokers (NZ), Futu Securities International (Hong Kong), and Longbridge Securities (Hong Kong) for “illegally conducting securities business within China”, stating their activities violated China’s securities, funds and futures laws and disrupted market order (破坏了市场秩序).

Specifically, the CSRC found that the three firms had, without mainland licenses, solicited mainland investors, executed trades, and offered fund and futures brokerage services in breach of the PRC Securities Law. The CSRC formally opened cases against both onshore and offshore entities of all three firms.

The CSRC’s announcement can be accessed here.

The penalties are significant. The CSRC proposed roughly 2.3 billion yuan (HK$2.67 billion) in confiscations and fines against the two firms and their founders, penalizing them for providing securities marketing and order-processing services on the mainland without the required licenses. The heaviest impact falls on their mainland client base. Drawing on end-of-2025 figures, the two firms are expected to wind down roughly 570,000 to 630,000 mainland-funded accounts over the coming two years, collectively holding between US$27 billion and US$29 billion in assets.

This enforcement action did not arise in isolation but represents the culmination of a multi-year regulatory campaign. The CSRC first flagged the issue in October 2021 and then formally acted on 30 December 2022[2], finding that Futu and Tiger Brokers had been operating a cross-border securities brokerage business for mainland residents without the requisite CSRC licence or approval. The CSRC accordingly ordered both firms to stop onboarding new mainland clients, though existing account holders were still permitted to trade and withdraw funds.

In response, Futu and Tiger withdrew their apps from mainland app stores in mid-2023, and by September 2023 the CSRC told brokerages based in offshore jurisdictions such as Hong Kong to stop offering securities trading accounts to new mainland investors, according to a Sept. 28 notice issued by its Shanghai unit. Compliance gaps persisted over the following two years, and a parallel 2026 Securities and Futures Commission review of 12 licensed brokers uncovered continued weaknesses, including inadequate due diligence on account opening documents, acceptance of forged or questionable documentation, and insufficient verification of clients’ cross-border correspondent relationships.[3]

2. The Legal Mechanism — Two-Year Rectification Plan

Alongside the enforcement action, the CSRC and seven other government departments jointly issued the “Implementation Plan for the Comprehensive Rectification of Illegal Cross-Border Securities, Futures and Fund Business Activities”[4], approved at the State Council level. The plan sets a two-year rectification period (集中整治期) to wind down existing illegal business, rather than terminate it outright.

During this period, affected brokers may only process sell orders and withdrawals — no new purchases, deposits, or account openings for mainland ID holders are permitted, and existing services cannot be expanded. Longbridge and Futu have already implemented these restrictions from 12 June 2026. Once the two years lapse, all mainland-facing platforms, apps, and servers must be fully shut down.

3. Parallel Hong Kong Regulatory Action

Crucially, this was never solely a Mainland story. On the same day as the CSRC’s announcement, the SFC issued its own circular to all licensed corporations[5], referencing the CSRC’s rectification plan directly. The circular followed the SFC’s review of 12 licensed brokers, which uncovered “significant deficiencies” in account-opening due diligence and ongoing monitoring of cross-border correspondent relationships with overseas intermediaries. Some brokers had accepted questionable or forged client documents, with certain accounts later linked to suspicious fund transfers involving no genuine trading activity.

4. Practical Takeaways for Clients

For SFC-licensed brokers and intermediaries, the priority is a targeted internal review: assess account-opening and beneficial-ownership verification processes for Mainland clients, verify with the clients at issue any accounts opened with questionable documentation, dormant zero-balance accounts, or accounts showing red flags such as shared addresses or bank accounts across unrelated clients. Firms should implement the SFC’s required investor declarations confirming that Mainland clients’ funds originate from lawful sources outside the Mainland. [6]

For asset managers and fintech platforms, this is a prompt to reassess any indirect subscription arrangements, nominee accounts, or omnibus structures that could be characterised as facilitating circumvention of PRC foreign exchange controls, even where the platform has no direct Mainland licensing exposure.

The SFC circular confirms that cross-border introducer arrangements do not dilute accountability, and that breaches of overseas regulatory requirements — including the CSRC’s own rules — may independently constitute a breach of paragraph 12 of the Code of Conduct, exposing licensees to SFC action regardless of the outcome of Mainland proceedings.

Non-compliance carries real consequences: the SFC has stated it has “zero tolerance” for forged documentation, and has warned it may impose external look-back reviews, restrictive licensing conditions under section 116(6) of the SFO, and formal enforcement action affecting a firm’s fitness and properness. Material breaches must also be self-reported to the SFC under paragraph 12.5(a) of the Code of Conduct.

More broadly, all cross-border businesses should treat this as a signal to strengthen senior management oversight of cross-border compliance controls on an ongoing basis, not as a one-off remediation exercise.

If you have any questions or would like to understand how these regulatory developments may impact your business or compliance obligations, please reach out to our Partner Kenneth Leung or our Associate Ronnie Tse.

This article 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.

[1] China Securities Regulatory Commission. (2026, May 22). 证监会严肃查处老虎等机构非法跨境展业案件 (CSRC sternly investigates and punishes illegal cross-border business activities by Tiger and other institutions).

[2] China Securities Regulatory Commission. (2022, December 30). 中国证监会推进富途控股、老虎证券非法跨境展业整治工作 (CSRC advances the rectification of illegal cross-border business activities by Futu Holdings and Tiger Brokers).

[3] Securities and Futures Commission of Hong Kong. (2026, May 22). Circular to licensed corporations: Expected controls for account opening and maintaining relationships with clients (Ref. No. 26EC29).

[4] China Securities Regulatory Commission. (2026, May 22). 关于印发《综合整治非法跨境证券期货基金经营活动实施方案》的通知 (Notice on the issuance of the “Implementation plan for comprehensive rectification of illegal cross-border securities, futures, and fund business activities”)

[5] Securities and Futures Commission of Hong Kong. (2026, May 22). Circular to licensed corporations: Expected controls for account opening and maintaining relationships with clients

[6] Securities and Futures Commission of Hong Kong. (2026, May 22). Deficiencies identified in the Review and standards expected of licensed corporations (Appendix B).

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.

Stevenson, Wong & Co. is pleased to announce that the firm has been shortlisted in six categories at the Asian Legal Business (ALB) Hong Kong Law Awards 2026, organised by Asian Legal Business, Thomson Reuters’ leading legal publication for the region.

The shortlist recognises the firm’s continued strength across a broad range of practice areas and reflects its commitment to providing high-quality legal services to clients in Hong Kong and across the Greater Bay Area. The nominations span both firm-wide and individual categories, highlighting the breadth of the firm’s capabilities and the recognition of its lawyers’ professional excellence.

The ALB Hong Kong Law Awards honour outstanding achievements by law firms, lawyers and in-house legal teams across Hong Kong. Winners are selected through an independent judging process based on a range of criteria, including legal expertise, significant matters handled, client service, market reputation and overall contribution to the legal profession.

The award winners will be announced at the ALB Hong Kong Law Awards ceremony on 11 September 2026 in Hong Kong.

Shortlisted Categories

Firm Awards

• Civil Litigation Law Firm of the Year
• Family and Matrimonial Law Firm of the Year
• GBA Law Firm of the Year (Hong Kong)
• Hong Kong Law Firm of the Year

 Individual Awards

• Dispute Resolution Lawyer of the Year – Heidi Chui
• Woman Lawyer of the Year (Law Firm) – Heidi Chui

Please click hereto view the complete list of nominations for the ALB Hong Kong Law Awards 2026.

On 20 April 2026, the Hong Kong Government and the Supreme People’s Court signed a new Arrangement on Mutual Service of Judicial Documents in Civil and Commercial Proceedings (the “New Arrangement”), marking an important step towards modernising cross-border judicial cooperation.

The New Arrangement will come into effect upon completion of the relevant legislative procedures in Hong Kong.

 Background

Since 1999, cross‑border service between Hong Kong and the Mainland has operated under a court‑to‑court entrustment mechanism, under which Hong Kong courts transmit judicial documents to their Mainland counterparts for onward service, and vice versa.

Over time, requests for mutual service of judicial documents have surged alongside the growth in cross-boundary interactions. Against this backdrop, the following challenges have become apparent:

1. Difficulty in locating respondents: In many cases, the intended recipient is no longer at the address provided or cannot be traced. Although Mainland courts may assist in attempting to locate updated addresses, such efforts are not always successful.
2. Limited flexibility and procedural complexity: Parties in Hong Kong have been restricted to effecting service in the Mainland through court transmission, with no alternative service methods formally available, resulting in an inflexible process. At the same time, the court entrustment mechanism involves multiple tiers of judicial administration, such that requests initiated by lower courts must be escalated through higher courts before service is effected, leading to delays and procedural complexity.

Expanded and Multi-Route Model of Service

Under the New Arrangement, service is no longer limited to court-to-court entrustment. The following modes of service are also recognised:

1. Postal service;
2. Electronic service, such as fax, e-mail and mobile communications (where the recipient has expressly consented or voluntarily provided an electronic address for service); and
3. Direct service through authorised persons, including legal representatives or notarisation institutions.

These modes may be used in parallel. Service may be regarded as effective based on the earliest successful method, which significantly enhances efficiency.

It should be noted that judicial documents to be served in the Mainland must be in the Chinese language. Where the documents are not in Chinese, a Chinese translation must be provided.

Where these methods prove unsuccessful, service may be effected by public announcement. In such cases:

1. The announcement must be published in media outlets with adequate circulation and influence in both the Mainland and Hong Kong; and
2. Service is deemed effective upon the expiry of 60 days from the date of the announcement.

Proof of Service

Proof that a document has been received may take various forms, including:

1. A certificate or proof of service issued by the court responsible for effecting service;
2. Signature by the recipient on the relevant service documents; and
3. Electronic system‑generated records evidencing receipt.

Importantly, service may also be deemed effective where the recipient has referred to the served judicial documents before the adjudicating court or has acted in accordance with those contents.

Relevance to Divorce Proceedings in Hong Kong involving parties in the Mainland

 The New Arrangement is expected to have practical significance in divorce proceedings involving the Mainland.

 Whilst it is not necessary to seek prior leave from the Hong Kong courts to serve divorce petitions and other documents in matrimonial proceedings out of jurisdiction, Order 11 of the Rules of the High Court must be complied with. Proceedings may be delayed if the petition or other documents cannot be properly brought to the attention of the respondent or other interested third parties in the Mainland.

The New Arrangement is therefore expected to facilitate the cross-border service of divorce petitions between Hong Kong and the Mainland, enhancing both efficiency and procedural flexibility, particularly in cases involving non‑cooperation or uncertainty as to the whereabouts of the respondent or other interested third parties.

Please contact our Partners, Wendy Lam and Calvin Lo, for any enquiries or further information.

This article 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.

On 26 May 2026, the Financial Services and the Treasury Bureau (“FSTB”) and the Securities and Futures Commission (“SFC”) published their consultation conclusions on the legislative proposal to regulate virtual asset (VA) advisory and management service providers in Hong Kong.

With the overarching goal of introducing a bill into the Legislative Council in 2026 under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (“AMLO”), these new regimes complete a critical node in Hong Kong’s digital asset ecosystem. However, beneath the surface of broad market support lies a shifting regulatory landscape that demands immediate attention, particularly for traditional asset managers who may have previously considered themselves outside the SFC’s virtual asset crosshairs.

Adhering strictly to the “same activity, same risks, same regulation” principle, the SFC is establishing a framework that mirrors the traditional Type 4 (advising on securities) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (“SFO”). For both existing VA-native firms and traditional asset managers, the margin for error has just been drastically reduced.

The “no de minimis” trap for traditional Type 9 asset managers

Perhaps the most commercially significant takeaway from the consultation conclusions is the explicit confirmation that the regulators will not set a de minimis threshold for the VA Management Regime.

Historically, traditional Type 9 asset managers could manage portfolios with limited VA exposure (below the established de minimis threshold) without triggering the full weight of VA-specific licensing conditions. That safe harbour is now gone. Intermediaries licensed by or registered with the SFC to carry on Type 9 regulated activities under the SFO, which currently manage portfolios with VA exposure below the de minimis threshold, will be required to obtain a licence or registration under the new VA Management Regime.

Crucially, they will be subject to the exact same regulatory standards as full-scale VA fund managers. For traditional funds that have dabbled in tokenised assets or hold small crypto allocations, this triggers an immediate need for comprehensive gap analyses to ensure their current AML/CFT frameworks, valuation policies, and risk management systems meet the exacting standards of the AMLO.

The “hard stop” threat: no deeming arrangements

The regulators are playing hardball regarding the transition. The FSTB and SFC have confirmed they do not plan to grant a “deeming arrangement” (grandfathering) to existing VA advisory or VA management service providers. The regimes will take full effect on the commencement date of the relevant statutory provisions.

The consequences of inaction are severe. The regulators have explicitly warned that providers who do not contact the SFC or the Hong Kong Monetary Authority (HKMA) for pre-application may suffer undue business disruptions, as they will have to stop operations on the commencement date. Firms must take appropriate steps as soon as possible to ensure proper transition, or wind down their VA management business in an orderly manner.

The silver lining: expedited fast track and early engagement

To mitigate market disruption, the SFC will introduce an expedited approval process for licensed corporations and registered institutions currently providing VA advisory and VA management services.

The regulators strongly encourage all industry stakeholders to reach out as soon as possible to initiate pre-application processes. Early engagement will allow firms to walk through the licensing process and help ensure their business models align with regulatory expectations.

Thematic inspections: the SFC’s escalating enforcement

This legislative overhaul does not exist in a vacuum; it coincides with an increasingly aggressive posture from the SFC regarding general asset management compliance. In October 2024, the SFC issued a circular flagging various deficiencies and substandard conduct identified during its supervision of licensed corporations managing private funds.

The SFC stated it will commence a thematic on-site inspection of asset managers managing private funds and will not hesitate to take decisive action against asset managers and their management, including Managers-In-Charge and Responsible Officers, for failures to discharge supervisory duties.

Because the new VA regimes operate on the “same activity, same risks, same regulation” principle, prospective VA managers must anticipate this exact level of scrutiny. Furthermore, VA management service providers who take a particular VA into custody on behalf of funds under their management (self-custody) will be subject to robust self-custody requirements.

So, what should asset managers do now?

The transition of VA advisory and management into the AMLO framework means that institutional-grade compliance and rigorous anti-money laundering controls are no longer optional. Instead, they are prerequisites for survival.

Stevenson, Wong & Co.’s Regulatory and Litigation practice is uniquely positioned to help your firm navigate this critical juncture. We routinely advise market-leading financial institutions, family offices, and virtual asset service providers on complex regulatory structuring and SFC enforcement matters.

Our team can assist you with:

• Pre-application strategy and SFC liaison: Initiating the pre-application dialogue with the SFC, ensuring your business model is structured optimally before formal submission.
• Regulatory gap analysis: Assessing your current operations — particularly for Type 9 managers caught by the removal of the de minimis threshold—against the new legislative requirements.
• Mock SFC inspections: Conducting rigorous, independent audits of your conflict of interest, risk management, and valuation frameworks to prepare your senior management for the SFC’s upcoming thematic on-site inspections.
• Compliance framework upgrades: Advising on institutional-grade AML/CFT policies tailored for digital assets, including protocols for blockchain analytics, wallet whitelisting, and robust transaction monitoring.

The window to secure a seamless transition is narrowing. Proactive engagement is the only viable strategy to protect your operations and capitalize on Hong Kong’s expanding digital asset ecosystem.

If you have any questions or would like to understand how these regulatory changes may impact your business or compliance obligations, please reach out to our Partner Kenneth Leung.

This article 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.