OSL Wins In-Principle Decision on Hong Kong Crypto License

Hong Kong’s financial regulator made an in-principle decision to grant Asia’s digital asset platform OSL its authorization to operate crypto-related business. An “in-principle” decision is the first stage of the full authorization process whereby the applicant needs to satisfy the Securities and Futures Commission (SFC) on one or more requirements in order to obtain a license.
OSL said that it would continue to work with the regulators to clear its licensing conditions with and secure a full provider license in Hong Kong. It looks to operate on as a regulated provider for brokerage and automated trading services, including security tokens.

OSL is a member of BC Group, a listed fintech and digital asset company, which touts its offering as the only audited by a Big Four firm. OSL operates a digital asset exchange and brings together relevant products such over-the-counter trading, brokerage, insured custody and wallet services.
OSL says its exchange boasts institutional-grade market-matching engine that processes hundreds of thousands of orders per second, and supports both Financial Information eXchange protocol and REST API connectivity, as well as collocation on request.
“Securing approval-in-principle for a virtual asset trading platform license in Hong Kong, inclusive of security tokens, underscores our commitment to comprehensively addressing the demands of institutional investors,” said BC Group CEO Hugh Madden.
SFC set out new regulations for cryptocurrency
 have been recently keen to create an expanded regulatory framework for cryptocurrency exchange platforms as the SFC wishes to offer more robust investor protection.
Part of their proposed paradigm are plans to issue licenses to cryptocurrency funds as the SFC’s mandate only covers assets that qualify as futures contracts or securities. As such, the watchdog plans to license all such funds, whether the crypto portfolios being managed are securities/futures contracts or not.
The SFC is also looking at exchange platforms as the regulator wants to examine whether exchanges should fall under their mandate. To this end, the commission plans to see how well such platforms respond to its regulatory provisions.
Licenses could be granted to the crypto exchanges complying with their existing requirements for Type 1 regulated activities (dealing in securities) and Type 7 (automated trading service (ATS)) regulated activities under the virtual asset licensing framework in Hong Kong. They are required to put in place controls to ensure proper due diligence, suitable solicitation, and adequate risk disclosure.

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