Huobi Tech, a fund manager in Hong Kong has plans to introduce a cryptocurrency tracking exchange-traded fund (ETF), especially for retail investors.
This move comes after the city released its recent guidelines for the sale of virtual assets, there was a relaxation concerning retail ownership of foreign ETFs. Due to the relaxation, Huobi Tech furthered its tracking efforts to track cryptocurrency worth $2 Trillion.
Huobi Tech, allegedly has submitted a plan to the Securities and Futures Commission (SFC) for its ETF. Along with targeting retail investors, the ETF will concern assets less than HK$8 Million ($1 Million).
“All the trading and redemption done directly in Hong Kong, would give better protection to investors, as the fund will be regulated under Hong Kong law,” stated Romeo Wang, the Senior Vice President of Huobi Tech. Wang also added, “”We will keep close and positive communications with regulators including the SFC and obtain the proper licenses and approvals.” regarding the Huobi’s application.
Huobi Tech is a separate and independent identity and is not connected to popular crypto-exchange Huobi Global in any manner.
The company was formerly known as Pantronics Holdings and was focused on electronic products, however, currently, Huobi Tech has ventured into the world of digital assets.
In other recent developments, the fund manager company launched a crypto-over-the-counter (OTC) desk in the first week of March.
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ETF In Correspondence To Current Regulations For Investment
In the month of February, The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority had specified that retail investors shall not be allowed to access ETFs. The reason why such a decision was taken involved safeguarding investors from the risks of trading digital assets.
This ETF in concern will be launched keeping all the rules and regulation regarding investments in place. Cryptocurrency based exchange-traded funds were earlier considered to be unsafe.
Only ‘professional’ investors were allowed to trade ETFs and by this, it means that investors with portfolios valued less than $1 Million could not trade ETFs.
Huobi Tech in its latest endeavor intends to bring change by creating a space for retail investors to participate in ETF trading.
Huobi Banks On Changed Exceptions For Retail Traders
The fund manager, Huobi Tech is currently depending on the relaxations made on crypto ETFs for specifically retail investors.
The chief regulatory bodies of Hong Kong had issued a joint circular, earlier this year, in which it had mentioned the restriction levied on retail investors who take part in the ETF market through regulated exchanges in the US and UK.
Additionally, in this circular, there has been a classification of asset-based products into two broad categories. These broad categories include complex and non-complex categories. For retail investors, they can only access the non-complex products.
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