APAC Monthly Private Wealth Legal Developments – February 2025

HKMA announces participating banks for RMB Trade Financing Liquidity Facility

The HKMA has announced the list of banks for the RMB Trade Financing Liquidity Facility in Phase 1 (see Annex).  Details of the facility are set out in the HKMA's circular of 7 February 2025 (see our previous update).

Around RMB50 billion of the total size of RMB100 billion of this facility has been allocated to the participating banks.  A specific quota is assigned to each bank based on the pipelines as expected by the bank, and the bank’s existing scale of relevant business, among other factors.  

The banks can now apply for RMB funds from the HKMA through the facility based on their provision of RMB trade finance to corporate customers within the assigned quota.

The HKMA will review the implementation of the facility, including its operation, banks’ RMB trade finance activities and facility usage, as well as market development needs.  Subject to the review, the HKMA plans to proceed to the next phase of quota allocation in around mid-2025. 

Banks not yet ready in Phase 1 are encouraged to continue developing their RMB trade finance business in order to be ready to join in later phases.  [28 Feb 2025]

SFC proposes to relax position limits for key exchange-traded derivatives

The SFC has launched a consultation on the proposal to increase the position limits for exchange-traded derivatives based on the three major stock indices in Hong Kong.  Feedback on the proposal is required to be submitted by 28 March 2025.

The proposal is aimed at enabling Hong Kong’s derivatives markets to keep pace with the growth in the market capitalisations of major stock indices and trading volumes of their constituents over the past years, without introducing additional risks to the markets.

To facilitate the hedging activities of market participants, the SFC proposes to lift the current position limits for the futures and options contracts by 50% to 15,000 position delta for the Hang Seng Index, 108% to 25,000 position delta for the Hang Seng China Enterprises Index, and 43% to 30,000 position delta for the Hang Seng TECH Index.

In determining the limit levels, the SFC has taken into account various factors, including the growth in market size and liquidity, as well as the existing utilisation of position limits by market participants.

To facilitate the implementation of the proposal, amendments will be made to the Securities and Futures (Contracts Limits and Reportable Positions) Rules and the Guidance Note on Position Limits and Large Open Position Reporting Requirements.  [27 Feb 2025]

Financial Secretary announces initiatives in 2025-26 Budget to accelerate development through reform and innovation

In his 2025-26 Budget Speech, Financial Secretary, Mr Paul Chan, outlined key initiatives to strengthen Hong Kong's economic foundation and accelerate development through reform and innovation.  Further information on the Budget can be found here, but the key initiatives relating to financial services include (among others):

Innovation and technology

• The HKMA will publish a practice guide by making reference to global development trends and experience in the generative artificial intelligence sandbox jointly launched with Cyberport in 2024.             
• The HKEX is actively taking forward the establishment of a dedicated 'technology enterprises channel' to facilitate specialist technology and biotechnology companies in preparing for listing applications, supported by the SFC.       

Securities and derivatives market

• The HKEX will step up its promotion in ASEAN and the Middle East and actively explore areas of co-operation with these regions, including the listing of exchange-traded funds, and increasing the number of overseas recognised exchanges to facilitate more overseas companies' secondary listing in Hong Kong.          
• The HKEX will put forward recommendations to enhance the issuance mechanism of structured products to provide greater flexibility for product listing and trading.      
• The HKEX will also continue to advance reforms to the trading mechanism (including shortening the settlement cycle to T+1), review with the SFC the trading unit system (or 'board lot system') with the aim of putting forward proposed enhancements within 2025, work on the implementation of the uncertificated securities market regime, and consult the public the proposal to increase the position limits for key index derivatives.  
• The HKEX will review listing requirements and post-listing ongoing obligations, evaluate listing-related regulations and arrangements to improve the vetting process, optimise the thresholds for dual primary listing and secondary listing, and review the market structure.

Fixed income and currency hub

• The Government will conduct research into the current legal and regulatory regime related to the issuance and transactions of digital bonds and explore enhancement measures to promote the wider adoption of tokenisation in Hong Kong's bond market.

Asset and wealth management centre

• The Government will formulate proposals on the preferential tax regimes for funds, single family offices and carried interest within 2025, including expanding tax exemptions and concessions.

Offshore RMB business centre

• Technical preparations are underway to implement the inclusion of the RMB trading counter under Southbound trading of Stock Connect.             
• The HKEX is taking forward the single tranche multiple counter arrangement to enhance settlement efficiency.              
• The Government has been conducting preparatory work to allow the stamp duty payable on the transfer of stocks at RMB counters to be paid in RMB, with a view to putting forward a legislative proposal next year.

Mutual market access and co-development with the Mainland

• The Government will continue to progress with the enhancements to the various mutual market access platforms.      
• The People's Bank of China and the HKMA are working to implement the linkage of faster payment systems of Mainland China and Hong Kong by around mid-2025, with a view to providing round-the-clock real-time, small-value cross-boundary remittance service for residents in both places.        

Virtual asset (VA) development

• The Government will soon promulgate a second policy statement on the development of VAs to explore how to leverage the advantages of traditional financial services and innovative technologies, enhance the security and flexibility of real economy activities, and encourage local and international companies to explore the innovation and application of VA technologies.       
• The Government will consult on the licensing regimes for VA over-the-counter trading services and custodian services within 2025.              

Gold and commodities

• A plan will be formulated within 2025 covering measures to enhance storage facilities, optimise trading and regulatory mechanisms, expand exchange products, and conduct market promotion. 

Green finance 

• The Roadmap on Sustainability Disclosure in Hong Kong provides a well‑defined pathway for large publicly accountable entities to adopt the International Financial Reporting Standards – Sustainability Disclosure Standards by 2028.            
• The Government will extend the Pilot Green and Sustainable Finance Capacity Building Support Scheme to 2028.        

The SFC, the HKMA, the Insurance Authority, and the Accounting and Financial Reporting Council have announced their support for the measures announced by Mr Chan.  [26 Feb 2025]

SFC proposes limits on three types of registrar fees under upcoming USM regime

The SFC has launched a consultation on proposed limits for three types of fees that an approved securities registrar (ASR) may charge under the upcoming uncertificated securities market (USM) regime.  Feedback on the proposals is required to be submitted by 23 April 2025.

In March and October 2023, the SFC consulted the market on the proposed subsidiary legislation, code and guidelines for implementing a USM regime in Hong Kong.  Among other things, the consultation sought views on whether the charging basis for the three types of fees should be standardised and whether limits should be set, which received general support.  The SFC therefore noted in its conclusions paper of July 2024 (see our previous update) that it would conduct a public consultation on the specific limits before finalising them.

The three types of fees and their respective proposed limits are:

• USI set-up fee (fee for setting up a facility that enables a person to hold and manage prescribed securities that are in uncertificated form (USI Facility)) – It is proposed that the fee should not exceed HK$50 per USI Facility;  
• Dematerialisation fee (fee for converting any prescribed securities from certificated form to uncertificated form – It is proposed that the fee should not exceed HK$5 per title instrument, subject to a HK$20 minimum; and
• Transfer and registration fee (fee for processing and registering transfers of any prescribed securities) (T&R Fee) – It is proposed that no T&R fee should be charged for transfers to investors from HKSCC Nominees Limited, and that for other transfers, the fee should not exceed 0.02% of the transaction value, subject to a HK$20 minimum. 

The main reasons for proposing limits on such fees are to provide a degree of protection to investors, and to align the charging basis to simplify processes and avoid confusion for the market.  In developing the limits, the SFC has sought to strike a balance among the costs shared by different stakeholders and maintain reasonable fees for investors.  

Subject to the legislative process of USM-related subsidiary legislation and market readiness, the SFC aims to implement the USM regime in early 2026.  [24 Feb 2025]

SEHK introduces enhancements to HKD-RMB Dual Counter Model, taking effect on 3 March 2025

The Stock Exchange of Hong Kong Limited (SEHK) has announced the following enhancements to the HKD-RMB Dual Counter Model, which will take effect on 3 March 2025:

• Introducing a wider bid-ask spread boundary for two-sided market making orders by dual counter market makers; and 
• Allowing such market makers to enter market making orders via Market Making Orion Central Gateway – Securities Market sessions and/or Orion Central Gateway – Securities Market sessions.

The SFC has approved amendments to the Rules of the Exchange (see clean and marked-up versions) to facilitate the above enhancements.

Exchange participants are advised to refer to the service factsheet for details.  [21 Feb 2025]

HKEX enhances stock settlement fee structure for securities market, taking effect in June 2025

The HKEX has announced (and issued a circular and an information sheet regarding) enhancements to the securities market stock settlement fee structure, aimed at boosting market efficiency and ensuring consistent fee application across all trade sizes.

The new fee structure, which has been approved by the SFC, will take effect in June 2025, ahead of the implementation of Phase 1 of the minimum spreads reduction (see our previous update), subject to market readiness.

The current fee structure, which includes a minimum fee of HK$2 and a maximum fee of HK$100, disproportionately impacts lower-value trades.  The HKEX will therefore remove the minimum and maximum fee components and adjust the ad valorem rate to 0.42 bps (0.0042%) for each trade.  The new fee structure is designed to be cost-neutral to the market, creating a more equitable fee structure across all trade sizes.

In addition, the stock settlement fee for eligible market making trades for exchange traded products (ETPs) will be set at a rate of 0.20 bps (0.0020%), removing the minimum and maximum fees.  This aligns with the historical costs of ETP market-making activities and aims to ensure the ongoing provision of liquidity to the ETP market.

According to the HKEX's data, around 77% of all securities trades conducted between 2019 and 2024 would benefit from lower fees under the new structure.

The General Rules of Hong Kong Securities Clearing Company Limited will be updated in due course to reflect the new fee structure.

CCASS participants are advised to assess with their internal IT support units or system vendors whether changes need to be made to their internal systems to accommodate the changes to the fee structure.  [21 Feb 2025]

SFC announces 'ASPIRe', a new regulatory roadmap to develop Hong Kong as a global virtual asset hub

The SFC has announced 12 major initiatives to enhance the security, innovation and growth of Hong Kong’s virtual asset market under a five-pillar 'ASPIRe' roadmap, which stands for Access, Safeguards, Products, Infrastructure, and Relationships.  

The roadmap is not the final destination but a living blueprint that invites collective efforts to advance Hong Kong’s vision as a global hub where innovation thrives within guardrails.  The initiatives will streamline access for global liquidity, enable adaptive compliance and product frameworks focusing on security, and drive infrastructure upgrades for traditional finance to tap into blockchain efficiency.

Pillar A (Access) – Streamline market entry through regulatory clarity

The key objectives of Pillar A are to expand market accessibility, encourage responsible participation, and enhance investor opportunities.  The initiatives include:

• Establishing licensing regimes for over-the-counter trading and custody services; and
• Attracting global platforms, order flows and liquidity providers to Hong Kong.

Pillar S (Safeguards) – Optimising compliance burdens without compromising security

The key objectives of Pillar S are to align compliance requirements, adopt risk-proportionate oversight, and promote regulatory clarity.  The initiatives include:

• Exploring adopting a dynamic approach to custody technologies and storage ratios;
• Enhancing insurance and compensation frameworks; and
• Clarifying investor onboarding and product categorisation.

Pillar P (Products) – Expand product offerings and services based on investor categorisation

The key objectives of Pillar P are to enable risk-appropriate investment tools, safeguard retail investors, and mitigate potential risks.  The initiatives include:

• Exploring a regulatory framework for professional investor-exclusive new token listings and virtual asset derivative trading;
• Exploring virtual asset margin financing requirements aligned with securities market risk management safeguards; and
• Considering allowing staking and borrowing/lending services under clear custody and operational guidelines.

Pillar I (Infrastructure) – Modernise reporting, surveillance and cross-agency collaboration

The key objectives of Pillar I are to strengthen market-wide oversight capabilities, detect illicit activities and misconduct at an early stage, and safeguard investor assets.  The initiatives include:

• Considering solutions for efficient regulatory reporting and deploying advanced surveillance tools to detect illicit activities; and
• Strengthening local cross-agency collaboration and promoting cross-border cooperation with global regulators.

Pillar Re (Relationships): Empower investors and industry through education, engagement and transparency

The key objectives of Pillar Re are to enhance investor understanding, foster industry participation, and promote fit-for-purpose policymaking.  The initiatives include:

• Considering a regulatory framework for financial influencers (also known as 'finfluencers') to address new investor engagement channels; and
• Cultivating sustainable communication and talent network.  [19 Feb 2025]

SFC issues restriction notices to two licensed corporations due to doubts over their honesty, reliability, integrity and competence

The SFC has issued restriction notices to Money Concepts (Asia) Holdings Limited and Money Concepts Asset Management Limited as a result of doubts over their honesty, reliability, integrity and ability to carry on regulated activities competently, honestly and fairly, and hence, their fitness and properness to remain licensed.

The restriction notices prohibit the licensed corporations from carrying on any business (whether directly or through agents) which constitutes regulated activities for which they are licensed under the Securities and Futures Ordinance, until further notice without the SFC's prior written consent.  The SFC considers that the issue of the restriction notices is desirable in the interest of the investing public or in the public interest.  [18 Feb 2025]

HKMA issues circular setting out refined measures on real-time fund transfers made by customers of AIs, to be implemented by 31 May 2025

The HKMA has issued a circular outlining refined measures for authorised institutions (AIs) regarding real-time fund transfers made by customers.  These measures aim to enhance the accuracy and security of fund transfers through the Faster Payment System (FPS) and intra-bank transfer systems.

In its circular of 21 December 2021 (see our previous update), the HKMA required AIs acting as payee institutions to conduct a mandatory name matching process on fund transfers effected on a real-time basis through the FPS and intra-bank fund transfers of similar nature, where a payer inputs the payee’s bank account number which is used as the identifier for effecting the fund transfer, and the transaction amount is HK$10,000 (or equivalent in other currencies) or above.  Such measure has significantly reduced instances of erroneous fund transfers made by customers inputting incorrect bank account numbers, and has helped detect scams as the payee’s name must be made known to the payer.  Nonetheless, the HKMA notes that some scammers pretend to be reputable merchants and deceive customers into making real-time fund transfers below HK$10,000 to evade the name matching process.

In light of the above, the HKMA encourages AIs to conduct mandatory name matching process for all applicable fund transfers irrespective of the transaction amount.  Where AIs wish to set a threshold for conducting the mandatory name matching process for operational efficiency purposes, the HKMA considers that such threshold should not be higher than HK$1,000 (or equivalent in other currencies).  Other arrangements in the December 2021 circular are largely unchanged, and the details are summarised at the Annex of the present circular.

AIs are expected to implement the refined measures by 31 May 2025.  [18 Feb 2025]

SFC clarifies regulatory requirements for authorising alternative funds for listing and indicates plan to issue discussion paper to seek industry's views on viability of allowing retail investors to invest in unlisted alternative funds without committing on any rule changes

The SFC has issued a circular to clarify its regulatory requirements for authorising closed-ended collective investment schemes (Alternative Funds) seeking a listing on the Stock Exchange of Hong Kong Limited (SEHK).  The new guidance aligns with the Government’s plan to broaden private equity fund distribution as set out in the 2024 Policy Address (see our previous update).

The current regulatory regime already allows Alternative Funds (which invest mainly in private and less liquid assets) to be authorised and listed on the SEHK without any impediments.  The present circular clarifies the SFC's requirements for authorisation.  A key criterion is that the fund should be sizeable with an expected market capitalisation of HK$780 million (US$100 million).  The fund should also preferably be able to generate regular income streams, depending on its investment strategy.  In addition, the SFC requires intermediaries to assess clients’ knowledge of these complex products before carrying out a transaction on their behalf.  Intermediaries should also ensure that their clients’ net worth is commensurate with the risks assumed.

The circular also sets out other key requirements, such as those relating to the management company, listing agent, open market, investment, distribution policy, valuation, disclosure, and investor education.

The SFC states that due to the wide array of alternative assets available, it may exercise its discretion to impose additional conditions, modify requirements or allow flexibility from strict compliance with certain regulatory requirements, taking into account the fund’s nature and investment strategy, on a case-by-case basis as appropriate.  Prior consultation with the SFC is required before an applicant applies for authorisation of an Alternative Fund for listing.

The HKMA has issued a circular to draw registered institutions' attention to the above circular as well as the SFC's earlier circular of 23 January 2025 on listed structured funds (see our previous update).

Separately, the SFC has indicated that it plans to issue a discussion paper in the first quarter of 2025 to seek the industry's views on the viability of allowing retail investors to invest in unlisted alternative funds without committing on any rule changes.  [17 Feb 2025]

SFC convenes inaugural Virtual Asset Consultative Panel meeting

The SFC has convened the inaugural meeting of the Virtual Asset Consultative Panel for licensed virtual asset trading platforms (VATP), which is chaired by the SFC’s Executive Director of Intermediaries, Dr Eric Yip, and comprises all licensed VATPs represented by members of their senior management. 

At the Hong Kong Fintech Week in October 2024, Dr Yip announced plans to form a consultative panel and launch the panel in early 2025 (see our previous update).  The panel will provide invaluable contribution to the SFC’s formulation of regulatory policy to further facilitate the development of a sustainable and resilient virtual asset ecosystem.  It will identify the policy priorities, paving way for market and regulatory developments backed by investor safeguards.  [14 Feb 2025]

Government gazettes six subsidiary legislation on operational and regulatory matters relating to USM regime, to be tabled before the LegCo for negative vetting on 19 February 2025

The Government has gazetted six pieces of subsidiary legislation under the Securities and Futures Ordinance setting out the detailed operational and regulatory matters relating to the uncertificated securities market (USM) regime.  The regime removes the need to use paper documents to evidence and effect transfers of legal title to securities, and is aimed at enhancing the efficiency and infrastructure of the Hong Kong securities market, as well as providing better investor protection and transparency.

This follows the SFC's consultation conclusions published in July 2024 in relation to the subsidiary legislation as well as SFC codes and guidelines (see our previous update, as well as updates in October and November 2024 regarding a USM information paper and introductory briefings).  

The six pieces of subsidiary legislation will be tabled before the Legislative Council (LegCo) for negative vetting on 19 February 2025.  Subject to vetting, the legislation will come into operation on a date to be appointed by the Secretary for Financial Services and the Treasury in the form of a Gazette notice:

• Securities and Futures (Uncertificated Securities Market) Rules;
• Securities and Futures (Approved Securities Registrars) Rules;
• Securities and Futures (Stock Market Listing) (Amendment) Rules 2025;
• Securities and Futures (Open-ended Fund Companies) (Amendment) Rules 2025;
• Securities and Futures Ordinance (Amendment of Schedule 8) Order 2025; and
• Securities and Futures Ordinance (Amendment of Schedule 5) Notice 2025.  [14 Feb 2025]

HKMA issues circular to provide further details of RMB Trade Financing Liquidity Facility, with a launch date of 28 February 2025

The HKMA has issued a circular to provide further details on the introduction of a RMB Trade Financing Liquidity Facility for authorised institutions (AIs) (see also the inSight article published by the HKMA's Chief Executive, Mr Eddie Yue).  The facility will be launched on 28 February 2025 on a pilot basis.

The introduction of the facility was announced in January 2025 as part of the six new measures to deepen financial cooperation between Hong Kong and the Mainland (see our previous update).

The HKMA notes that the policy objective of the facility is to provide a stable source of funding for AIs to support RMB-denominated trade finance activities.  AIs can tap the facility to support both new and existing trade-finance products and services, such as granting new facilities, renewing existing facilities and purchasing trade bills from customers.

The circular provides an overview of the terms of the facility, including a total size of up to RMB100 billion, with one, three and six-month tenors.  A quota will be assigned to interested AIs participating in RMB business, which can then obtain RMB funds from the HKMA based on their provision of RMB trade finance to corporate customers.

Participating AIs can apply for a quota at the launch of the facility by submitting the required information by close of business on 17 February 2025.

The HKMA emphasises that participating AIs utilising the facility must ensure that the tapping of the facility is fit for purpose and within scope – they should establish proper oversight of the usage of the facility and have appropriate control systems for monitoring and reporting to the HKMA any deviation from the purpose of the facility.  As part of their usual trade finance business practices, participating AIs should have adequate governance and controls for managing the associated risks, including performing due diligence and verifying the RMB trade financing needs of customers.

Participating AIs applying for a quota will be required to designate two senior executives from the first and second lines of defence respectively (such as the business head for RMB trade finance and chief risk and/or compliance officer) for ensuring that the AIs’ tapping of the facility is fit for the purpose and that the funding obtained is used appropriately.

The HKMA will adopt a phased approach, enabling AIs that have already implemented adequate governance and controls to tap the facility on a pilot basis commencing on 28 February 2025.  It will proceed to the next phase around mid-2025.  [7 Feb 2025]

MAS and police advise consumers to stay alert to scammers

The Singapore Police Force and MAS has issued an alert to remind the public to remain vigilant against scams involving impersonation of staff from Shopee, UnionPay and MAS. Since January 2025, the police have received 12 cases of reports, with total losses amounting to at least S$1.4 million.  [28 Feb 2025]

MAS: Written response to PQ on strategies to enhance Singapore's appeal to investors

MAS has published a written response to a parliamentary question (PQ) on its strategies to enhance Singapore's appeal to investors and how current monetary policy aligns with these efforts.

MAS explains that despite a more challenging global economic environment, Singapore remains an attractive destination for foreign investment, reflecting a range of factors such as political stability and rule of law, pro-business environment, global and regional connectivity, and a skilled workforce. MAS’ monetary policy contributes by securing domestic price stability.  [27 Feb 2025]

MAS: Measures to strengthen competitiveness of equities market

MAS' Equities Market Review Group (EMRG) has announced its first set of measures to strengthen the competitiveness of Singapore’s equities market. The measures seek to deepen trading liquidity and strengthen capabilities in the local fund management and equity research ecosystem. In addition to a number of tax changes, the measures include:

• MAS and the Financial Sector Development Fund will launch a S$5 billion Equity Market Development Programme under which MAS will invest with selected fund managers with capabilities to implement investment mandates with a strong focus on Singapore stocks
• An adjustment to the Global Investor Programme (GIP) to support more capital inflows into Singapore-listed equities.
• Expansion of the Research Development Grant Scheme under MAS’ Grant for Equity Market Singapore (GEMS) to build a ready investor base, sharpen focus on mid- and small-cap enterprises, and broaden research dissemination including via new media channels. MAS and the Singapore Exchange (SGX) will release further details around mid-2025.
• The Government will continue to enhance support for the development of local enterprises that will provide a pipeline of potential companies for listing.
• Consolidation of listing suitability and prospectus disclosures review functions in Singapore Exchange Regulation (SGX RegCo).
• Reduction in the scope for merit-based judgment when admitting new listings, by streamlining SGX RegCo’s qualitative admission criteria.
• Streamlining of prospectus requirements and listing processes.
• Adopting a more targeted approach to post-listing queries, alerts and trading suspensions.

The measures were discussed in a speech by MAS Deputy Chair Mr Chee Hong Tat, at the EMRG conference.  [21 Feb 2025]

MAS: Equities Market Review Group submits first set of measures to strengthen Singapore’s equities market to Prime Minister and Minister of Finance

MAS has announced that the Equities Market Review Group has submitted its first set of proposals on how to strengthen Singapore’s equities market development to the Prime Minister and Minister for Finance. These include proposals to introduce tax incentives to spur more listings and investments in Singapore’s equities market.

The Review Group will provide more information on its first set of measures on 21 February 2025. It will also continue to work on the next set of measures, which will be presented later in 2025.  [13 Feb 2025]

MAS: Written response to PQ on review of definitions of specific classes of investors under SFA

MAS has published a written response to a parliamentary question (PQ) on the review of definitions of specific classes of investors under Section 4A of the Securities and Futures Act 2001 (SFA).

MAS explains that the SFA sets out the asset and income thresholds for an individual to become eligible for 'accredited investor' status. The accredited investor eligibility criteria were last updated in 2018 to introduce a S$1m cap on the value of an individual’s primary residence that could be used in the net personal asset assessment. Investors who meet the eligibility criteria are required to expressly opt in before they can be treated as an accredited investor by a financial institution.

Investors who meet the eligibility criteria may be offered the option to become accredited investors, enabling them to access a larger suite of products and services but not according them the same level of regulatory safeguards as retail investors.  [5 Feb 2025]

MAS: Written response to PQ on SFO tax incentives and licensing

MAS has published a written response to a parliamentary question (PQ) on tax incentives and on the licensing of single family offices (SFOs) under the SFA.

MAS explains that SFOs manage only the monies of the family and do not serve third-party clients. As such, they are not subject to licensing under the SFA. Following MAS' consultation on the proposed framework for SFOs, MAS will be introducing a licensing class exemption framework, which will require SFOs to notify MAS of their presence and comply with specific requirements with respect to anti-money laundering (AML) controls. MAS explained that the number of SFOs awarded tax incentives was over 2,000 at the end of 2024.  [5 Feb 2025]

Revamp of the Whitelist of crypto assets eligible for trading

The Indonesia Commodity Futures Trading Regulatory Agency (Bappebti) has issued Bappebti Regulation No. 1 of 2025 (Regulation 1/2025, in Indonesian language) as the third amendment to Bappebti Regulation No. 11 of 2022 on the Stipulation of List of Crypto Assets Traded on Crypto Assets Physical Market which was previously amended by (i) Bappebti Regulation 4 of 2023; and (ii) Bappebti Regulation 2 of 2024 (Regulation 11/2022, in Indonesian language).

Regulation 1/2025 revamps the list of crypto assets eligible for trading on the crypto assets physical market (the Whitelist) to meet market needs and provide legal certainty and protection for crypto transactions in Indonesia. Previously, Bappebti Regulation 11/2022 covered 545 crypto assets in the Whitelist. The Whitelist now officially includes the additional 851 crypto assets by the issuance of Regulation 1/2025.

Regulation 1/2025 was issued on 9 January 2025, a day before the regulation and supervision authority of crypto assets were effectively transferred from Bappebti to OJK as regulated under OJK Regulation No.27 of 2024 on the Trading Operation of Digital Financial Assets including Crypto Assets (Regulation 27/2024, in Indonesian language). While Regulation 27/2024 has been in effect since 10 January 2025, the transitional provisions therein expressly provide that the Whitelist published by Bappebti remains valid until the OJK licensed exchange publishes a new list of crypto assets eligible for trading. This new list is expected to be published by April 2025.  [14 Feb 2025]

New OJK Regulation on Financial Derivatives with underlying assets in the form of securities

The OJK has issued OJK Regulation No. 1 of 2025 on the Financial Derivatives with Underlying Assets in the Form of Securities (Regulation 1, in Indonesian language) to implement the mandates to transfer the regulation and supervision authority of financial instrument (in the form of securities) that are subject to futures contracts, sharia derivatives contracts and/or other derivatives contracts, under Law No. 4 of 2023 on the Development and Strengthening of Financial Service Sector from Bappebti to OJK by January 2025.

Regulation 1 is in effect since 10 January 2025 and governs, among others, the following:

• types of financial derivatives products with underlying assets in the form of securities (Financial Derivatives) and the requirements to obtain OJK approval for trading these products;
• Financial Derivatives actors, which includes securities brokerage, investment advisors, other parties that are licensed by OJK, and investors; and
• operators of market infrastructure for Financial Derivatives transactions, which includes operators of transactions or trading facilities, operators of clearing, guarantee and settlement facilities, operators of storage and administration facilities, and operators of reporting facilities.

Existing Financial Derivatives products, certain Financial Derivatives actors, and certain operators of Financial Derivatives market infrastructure that are previously licensed by Bappebti must apply for a principal approval from OJK by no later than 10 May 2025. The maturity date of Financial Derivatives products issued before 10 January 2025 may not be extended and are considered to be due by 10 July 2025. Certain Financial Derivatives actors and certain operators of Financial Derivatives market infrastructure must ultimately apply for a licence from OJK by no later than 10 January 2027.  [14 Feb 2025]

BNM: Malaysia, Indonesia and Thailand adopt local currency transaction framework

BNM has announced the adoption of a harmonised local currency transaction framework operational guidelines (LCTF OG) and the expansion of eligible cross-border transactions under the framework, alongside Bank Indonesia and the Bank of Thailand.

The LCTF OG consolidates bilateral guidelines previously established between the countries and allows for streamlined processes with greater transparency for participating financial institutions and their users.  [17 Feb 2025]

SCM issues regulatory sandbox guidelines

The SCM has published its regulatory sandbox guidelines which detail the eligibility criteria and requirements for participation. Applications for the sandbox will open from 15 April until 31 May 2025; applicants will be notified within 30 days of submission if they have progressed to the evaluation stage.  [17 Feb 2025]

SECT holds workshop to combat rise of mule accounts

The SECT has announced that it held a workshop in collaboration with the Thai Digital Asset Operators Trade Association, digital asset business operators, and relevant organizations to lay out more measures for tackling mule accounts.  [25 Feb 2025]

BoT consults on guidelines regarding customer data

The BoT has published a consultation on draft guidelines for a mechanism allowing customers to exercise their right to submit data with the financial institution sector under the Your Data Project. Responses are requested by 14 March 2025. BoT expects to publish final guidelines in Q2 2025.  [19 Feb 2025]

 

IFSCA consults on regulatory approach towards tokenisation of real-world assets

IFSCA has published a consultation on its regulatory approach towards the tokenisation of real-world assets. The proposed regulatory approach centres around four broad themes:

• definition and key characteristics of digital tokens;
• mechanisms for the issuance, custody, trading, clearing and settlement of digital tokens;
• an appropriate risk management framework for digital tokens; and
• providing suitable catalysts for the organic growth and development of the digital tokens market.

Responses are requested by 20 March 2025.  [26 Feb 2025]

SEBI consults on enhancing trading convenience and strengthening risk monitoring in equity derivatives

SEBI has published a consultation seeking feedback on a proposal to transition the methodology for computing open interest in equity derivatives from notional terms to a 'Future Equivalent' (Delta-based) approach, and related matters.

Responses are requested by 17 March 2025.  [24 Feb 2025]

RBI: Forward Contracts in Government Securities Directions, 2025

The RBI has published the Reserve Bank of India (Forward Contracts in Government Securities) Directions, 2025. The Directions apply to forward contracts in government securities (bond forwards) undertaken in the over-the-counter market in India, and come into effect from 2 May 2025.  [21 Feb 2025]

SEBI consults on expanding the definition of QIBs under ICDR Regulations

SEBI has published a consultation on expanding the definition of Qualified Institutional Buyers (QIBs) under the Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018, to include accredited investors for the limited purpose of investments in Angel Funds. The aim is to allow the scaling up of Angel Funds by attracting more investors who are independently verified as having the necessary risk awareness and appetite, while staying in conformity with the regulatory objective.

Responses are requested by 14 March 2025.  [21 Feb 2025] 

SEBI consults on amendments to InvITs and REITs master circulars

SEBI has published a consultation on proposed amendments to master circulars for real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). The proposals relate to:

• the review of lock-in provisions for preferential issue of units for InvITs and REITs; and
• guidelines for follow-on offer by a REIT and a publicly offered InvIT.

Responses to the consultation are requested by 13 March 2025.  [20 Feb 2025]

SEBI consults on measures to create secure trading environment

SEBI has published a consultation on proposed technology-based measures to create a secure  trading environment and to prevent unauthorised transactions in trading and demat account. Responses to the consultation are requested by 11 March 2025.  [18 Feb 2025]

SEBI: Most Important Terms and Conditions for investment advisers and research analysts

SEBI has published two sets of Most Important Terms and Conditions which form part of the agreements investment advisers and research analysts are required to enter into with clients. The circulars have immediate effect.  [17 Feb 2025]

RBI: Government securities transactions

The RBI has decided to permit the matching of transactions in government securities between a primary member (PM) and its own gilt account holder (GAH) or between two GAHs of the same PM on both the anonymous order matching segment and the request for quote (RFQ) segment of the Negotiated Dealing System - Order Matching (NDS-OM).

The RBI has also extended the facility of clearing and settlement through the Clearing Corporation of India Limited to transactions between a PM and its own GAH or between two GAHs of the same PM which are bilaterally negotiated and reported to NDS-OM, on an optional basis.  [17 Feb 2025]

SEBI consults on amendments to guidelines on disclosure of financial information by REITs and InvITs

SEBI has published a consultation on proposed amendments to the guidelines on the disclosure of financial information in the offer document and the placement memorandum by REITs and InvITs. The circular includes a table setting out the major changes proposed. Responses are requested by 7 March 2025.  [14 Feb 2025]

SEBI consults on investment advisor and research analyst fees

SEBI has released for comment its proposal to reconsider the period for advance fees, which investment Advisers and research analysts are currently able to charge their clients. Feedback is requested by 27 February 2025.  [12 Feb 2025]

SEBI consults on margin pledge process

SEBI has released for comment a draft circular on margin obligations to be given by way of pledge or re-pledge in the depository system.  Among the issues which SEBI is seeking to address is the risk that client securities accumulated in brokers' demat accounts could be misused. Feedback is requested by 4 March 2025.  [12 Feb 2025]

SEBI consults on approach to unclaimed funds and securities

SEBI has issued a consultation on the treatment of unclaimed funds and securities lying with trading members. Feedback is requested by 4 March 2025.  [11 Feb 2025]

RBI statement on developmental and regulatory policies

The RBI's latest statement on policy measures has been released.

Financial markets:

• Final directions facilitating the introduction of forward contracts in government securities will be issued 'shortly'.
• Instructions are being issued to allow access to the Negotiated Dealing System – Order Matching (an electronic trading platform for secondary market transactions in government securities) by non-bank brokers registered with the SEBI.
• The RBI has published the details of a new working group to conduct a review of trading and settlement timings of RBI-regulated markets, including the membership and the terms of reference. The working group is expected to report by 30 April 2025.

Cybersecurity:

• In response to increased instances of fraud in digital payments are a significant concern, the RBI is introducing an exclusive internet domain for Indian banks. Registrations will commence from April 2025. Detailed guidelines for banks will be issued separately. Going forward, it is planned to have an exclusive domain for other non-bank entities in the financial sector.

Payment Systems:

• In order to provide a similar level of safety for online international transactions using cards issued in India, the RBI will propose enabling additional factor of authentication for international card not present (online) transactions. A draft circular will be issued 'shortly' for feedback.  [7 Feb 2025]

IFSCA introduces liquidity enhancement schemes in commodity derivatives contracts

The IFSCA has announced that it has decided to permit the Bullion Exchange in the International Financial Services Centre to introduce one or more liquidity enhancement schemes in commodity derivatives contracts, subject to certain requirements.  [4 Feb 2025]