Hong Kong finalises VA advisory and management licensing — what the consultation conclusions mean for Type 4/9 intermediaries and the wider market

This document has been prepared by Charles Russell Speechlys LLP for informational purposes only. Refer here for the PDF version. This article updates and builds on our January 2026 publication on this topic. The earlier article is available here.

Hong Kong has taken the next decisive step in building out its dedicated virtual asset regulatory architecture. In May 2026, the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) published consultation conclusions on the legislative proposal to regulate virtual asset (VA) advisory service providers and VA management service providers, completing the suite of purpose-built AMLO-based licensing regimes that began with the VA dealing and custodian consultations concluded in December 2025.

The one-month consultation period, which closed on 23 January 2026, attracted 51 submissions from market participants, industry associations, professional bodies, and individuals. The market’s verdict was broadly supportive: the majority of respondents agreed that regulating VA advisory and VA management services is a natural progression following the VATP licensing regime introduced in June 2023, and a prerequisite for sustainable and responsible development of Hong Kong’s digital asset ecosystem.

In this article, we break down the confirmed positions, key clarifications, and practical implications arising from the consultation conclusions — providing essential guidance for firms currently operating under the SFC-HKMA Joint Circular ^[1] “VA uplift” for Type 4 (advising on securities) and Type 9 (asset management) regulated activities, and for new entrants seeking to provide VA advisory or VA management services in Hong Kong.

Standalone AMLO licences for VA advisory and VA management

The consultation conclusions confirm the FSTB's and SFC's intention to proceed with dedicated licensing regimes under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (AMLO), with a bill to be introduced into the Legislative Council in 2026. The VA Advisory Regime and the VA Management Regime will operate as standalone regimes, replacing the current practice of imposing terms and conditions as licensing or registration conditions on intermediaries under the Securities and Futures Ordinance (Cap. 571) (SFO).

This represents the final piece in a broader regulatory mosaic: alongside the VA Dealing Regime and the VA Custodian Service Provider Regime already concluded, the VASP Regimes will collectively provide a comprehensive, activity-specific licensing framework for the four core VA service verticals — dealing, advisory, management, and custody.

VA Management Services: scope, coverage and key clarifications

Adopted definition

The VA Management Regime will cover any person who carries on a business in Hong Kong in providing a service of managing a portfolio of VAs for another person. Critically, no de minimis threshold will apply — a significant departure from the current 10% per-portfolio trigger under the Joint Circular uplift.

Key clarifications on scope

Discretionary power is the determinant 

The regime captures management of a portfolio of VAs where the manager has discretionary power to make investment decisions in respect of the VAs for another person, including management of funds and discretionary accounts (investment mandates or pre-defined model portfolios).

No de minimis threshold 

Under the current Joint Circular uplift, VA Management Terms and Conditions are imposed on Type 9 regulated activity (RA9) intermediaries only where a portfolio has a stated investment objective to invest in VAs or intends to invest more than 10% of its gross asset value (GAV) in VAs, applied on a per-portfolio basis. The VA Management Regime eliminates this threshold entirely — any discretionary management of a portfolio of VAs, regardless of the proportion of VA exposure, will require a standalone AMLO licence. Intermediaries currently below the threshold and not subject to VA Management Terms and Conditions will now need to be licensed, though their accumulated experience managing VA portions of portfolios will count towards the experience requirements.

Delegation does not relieve the obligation

A firm with full discretionary power must be licensed even if it sub-contracts its investment management role. The sub-contractor must also be licensed if carrying on VA management in Hong Kong.

VA-referencing products excluded from VA Management Regime

Managing portfolios investing in derivatives, structured products referencing VAs, VA spot ETFs, or VA futures ETFs falls within RA9 under the SFO. Managing a portfolio of both VAs and VA-referencing investment products requires both a VA management licence under the AMLO and an RA9 licence under the SFO.

Companies trading proprietary VAs and fund-of-funds (FoFs)

Managing portfolios investing in companies whose principal business is proprietary VA trading, or FoFs investing in underlying VA funds, does not generally require a VA management licence as the service is essentially management of portfolios of securities.

Inadvertent VA acquisition

Where tokens held in a portfolio cease to be "securities" under the SFO due to an unexpected event, and all reasonably practicable steps are taken to dispose of the VA holdings in a timely manner, this may not trigger a licensing requirement. However, if it is decided that the VA holdings should remain, a licence is required.

VAs used for subscriptions, redemptions, and settlement

The key determinant is whether the fund manager has discretionary power over investment decisions in respect of the VAs (e.g., converting to cash, investing in other assets, or holding). Where VAs form part of the managed portfolio and the manager has such discretion, a licence is required.

Technology neutrality

Using technology tools (algorithms, AI LMs) to assist with VA management does not alter the regulatory characterisation. Robo-advisers with automatic portfolio rebalancing mechanisms amount to VA management.

Dealing exemption for VA managers

An exemption from the VA dealing licence will be available where a VA management licensee deals in VAs solely for the purpose of carrying on VA management — mirroring the SFO exemption for RA9 licensees from obtaining a Type 1 regulated activity (RA1) licence.

Stablecoins carve-out

Appropriate exemptions will be introduced for SFC-licensed or registered intermediaries from obtaining relevant VA service provider licences in relation to their SFO activities involving "Relevant Stablecoins" (specified stablecoins issued by persons licensed by the Hong Kong Monetary Authority (HKMA) under the Stablecoins Ordinance (Cap. 656)).

Exemptions

The exemption for wholly-owned group companies applies only to VA management services provided to a wholly-owned subsidiary, its holding company, or a wholly-owned subsidiary of that holding company, in respect of that group company's own VAs (not client assets). The exemption for registered trust companies has been retained as proposed.

As regards family offices, the assessment of whether a family office requires a VA management licence is substantively the same as for RA9 under the SFO, and family offices may refer to the SFC's existing Circular on licensing obligations of family offices and related FAQs for guidance.

On staking, SFC-authorised VA funds may continue to engage in staking under the VA Management Regime, and private funds will not be restricted from doing so.

How this compares to the current Joint Circular requirements

The regulatory requirements under the Joint Circular will form the baseline for the VA Management Regime, but several key shifts are evident:

VA Advisory Services: scope, coverage and key clarifications

Adopted definition

Consistent with the principle of "same activity, same risks, same regulation", the scope of "advising on VA" will cover any person who carries on a business in Hong Kong in:

• Giving advice on whether, which, the time at which, or the terms or conditions on which VAs should be acquired or disposed of; or
• Issuing analyses or reports for the purposes of facilitating recipients' decisions on whether, which, the time at which, or the terms or conditions on which VAs are to be acquired or disposed of.

Key clarifications on scope

The SFC has provided significant guidance on a number of areas of market uncertainty:

• Substance over form: Whether a licence is required depends on the substance of the activity, not how it is described, labelled, or disguised — including as "educational" content, research, general commentary, or "trading signals".
• Mirror trading and copy trading: Providing information, trading signals, or alerts on when to buy, sell, or hold VAs for others to replicate constitutes advising on VAs. Where execution is also provided, this constitutes VA dealing; where trades are executed on a discretionary basis, this amounts to VA management.
• Technology neutrality (AI and algorithms): The regime is technology neutral. Providing VA advisory services involving algorithms or AI language models does not change the regulatory characterisation. Providing technology tools that generate advice on VAs for others' use — such as tools making specific recommendations based on user investment profiles or providing alerts on when VAs should be acquired or disposed of — amounts to providing VA advisory services.
• Generic factual information excluded: Activities only involving the provision of generic factual information about VAs or the VA market, or the provision of technology tools that objectively filter such factual information for self-directed research, are not captured.
• Tokenised securities excluded: The AMLO definition of VA expressly excludes securities. Advising solely on tokenised securities falls within Type 4 regulated activity (RA4) under the SFO, not the VA Advisory Regime.
• VA-referencing derivatives: Advising on derivatives and structured products referencing VA generally falls within RA4, Type 5 (advising on futures contracts), and/or Type 11 (dealing in OTC derivative products or advising on OTC derivative products) regulated activities under the SFO.
• Hard forks, airdrops, and voting rights: VA custodian or dealing service providers which merely inform clients on voting rights, hard fork deadlines, or airdrop events are generally out of scope, as these activities do not involve the provision of advice concerning the acquisition or disposal of VAs.

Exemptions

The consultation conclusions confirm exemptions mirroring those for RA4 under the SFO. The exemption for advice provided through a generally available publication or broadcast matches the scope of the corresponding SFO exemption. The exemption for wholly-owned group companies applies only to a corporation advising a group company which is its wholly-owned subsidiary, its holding company which holds all its issued shares, or a wholly-owned subsidiary of that holding company, in respect of that group company's own assets (not client assets).

Notably, the SFC has declined to introduce an exemption for intermediaries providing VA advice "wholly incidentally" to their RA4 business. Even where advice on VAs and securities forms part of a single portfolio recommendation, the VA advice is separate and requires a distinct licence.

How this compares to the current Joint Circular requirements

The existing Joint Circular requirements will form the baseline for the VA Advisory Regime, though they will be reviewed and updated in due course. The key differences are set out below:

Custody arrangements for private funds

One of the most contested issues in the consultation was whether VA management service providers should be required to custody private fund VAs exclusively with SFC-regulated VA custodians.

The conclusions strike a balanced position. Private funds will retain flexibility to appoint qualified custodians globally, mirroring the current SFO treatment for RA9 managers. This acknowledges that private funds often require access to a range of custodians for token coverage, integrated cross-border settlement, and to reduce counterparty concentration risks.

Where a particular VA is not supported by any qualified custodian, VA management service providers may take custody on behalf of funds, subject to robust self-custody requirements to be prescribed by the SFC. Self-custody triggers higher financial resources requirements. VA management service providers should also be vigilant as to whether and when their custody activities amount to carrying on a business of providing VA custodian services, which would require a separate licence.

Financial resources requirements

The consultation conclusions confirm capital requirements benchmarked to SFO analogues: 

Active marketing prohibition and overseas providers

The VASP Regimes will prohibit any person — whether in Hong Kong or elsewhere — from actively marketing VA advisory or VA management services to the public of Hong Kong, unless the person is licensed by or registered with the SFC. This mirrors the existing SFO marketing provisions and directly addresses the borderless nature of VA activities and the risks posed by digital channels and finfluencer activities. Further guidance on the scope of "actively market" will be provided in due course.

What practical steps need to be taken?

The confirmation of these regimes carries several immediate practical consequences for the market, and the transition framework demands early action.

For Type 9 intermediaries currently managing VA portfolios

The removal of the de minimis threshold is perhaps the most significant practical change. Every RA9 manager with discretionary power over any VA exposure — however small — will need a VA management licence under the new regime. This brings regulatory certainty but also expands the population of firms requiring licensing. Intermediaries currently managing portfolios with VA exposure below the 10% de minimis threshold will be required to obtain a VA management licence, though the relevant experience of their staff in managing the VA portion of portfolios will count towards the experience requirements. Those not intending to be licensed should take steps to ensure orderly wind-down of their VA management business by the commencement date.

For Type 4 intermediaries currently providing VA advice under the uplift

The standalone VA Advisory Regime will replace the current terms-and-conditions-based approach. The "wholly incidental to RA4" argument has been expressly rejected — firms advising on both securities and VAs will need separate licences for each. The good news is that dual licensees will not face double capital requirements, being subject only to the highest requirement across all licences held.

For technology and AI-driven advisory platforms

The technology-neutral approach means that any platform generating personalised VA recommendations — whether through algorithms, AI language models, or robo-advisory tools — will require the appropriate licence. Generic information tools and objective data filters remain outside scope.

For private fund managers

The flexibility to appoint global custodians and engage in limited self-custody provides welcome relief, preserving operational models that require access to diverse custody solutions for less liquid or novel tokens.

For finfluencers and digital content creators

While no comprehensive finfluencer framework has been introduced at this stage, the SFC's clear statement that substance determines regulatory capture — regardless of labels like "education" — combined with the active marketing prohibition and the signalled holistic review, should put finfluencers on notice.

Transition — no deeming, early engagement essential

The VA Advisory Regime and the VA Management Regime will take full effect on the commencement date — there will be no transitional deeming of existing operators as licensed. The Government and the SFC will consider the appropriate commencement date taking into account the time market participants need to adjust their business models. Firms already engaged in or interested in providing VA advisory or VA management services should reach out to the SFC (via fintech@sfc.hk) or the HKMA as soon as possible to initiate pre-application processes. Those which do not contact the SFC or the HKMA for pre-application may have to stop operations on the commencement date. Licensed corporations and registered institutions currently providing VA advisory and VA management services will benefit from an expedited approval process. VA service providers may also appoint personnel from within their corporate group to senior management roles, subject to proper management of conflicts of interest, confidentiality, and demonstrating sufficient time dedication.

Relationship with the existing Joint Circular

The Joint Circular requirements currently applicable to SFC-licensed or registered intermediaries providing VA dealing, VA advisory, and VA management services will form the baseline requirements under the respective VASP Regimes once they come into force, and will be reviewed and updated in due course. The SFC will conduct a public consultation on the proposed regulatory requirements for the VA Advisory Regime and the VA Management Regime separately.

Concluding remarks

These consultation conclusions represent the final substantive building block in Hong Kong's comprehensive VA regulatory framework. With dedicated licensing regimes now confirmed for all four core VA activity verticals: dealing, advisory, management, and custody.

The approach adopted by the regulators reflects a balanced philosophy between commercial pragmatism and investor protection. The commitment to technology neutrality, the sensible approach to private fund custody, ability to transact on unlicensed exchanges, ability to carry out staking,  the careful handling of the de minimis threshold removal, and the principled rejection of artificial carve-outs all signal a regime designed for institutional credibility and long-term market development. It is also reassuring to see that many of the uncertainties around the Joint Circular currently in place over licensed intermediaries have finally been clarified – including, for example, incidental exemptions such as whether a Type 9 VA uplifted manager can carry out Type 1 VA dealing without needing a separate uplifted Type 1 licence.  

Firms operating in or contemplating entry to Hong Kong's VA advisory and management space should act now. The absence of a deeming arrangement means that early engagement with the SFC or HKMA is not merely advisable — it is essential to avoid business disruption at commencement. With the legislative bill targeted for introduction in 2026, the window for pre-application and transition planning is narrowing.  Want to find out more?  Come speak to our Funds and Regulatory team today to see how we can assist with your application, structuring and launching your VA products.

 ^[1] Joint circular on intermediaries’ virtual asset related activities issued on 22 December 2023 as supplemented by the supplemental joint circular on intermediaries’ virtual asset-related activities issued on 30 September 2025.