The Securities and Futures Commission's 3 November 2025 circulars meaningfully widened the perimeter of Hong Kong's Virtual Asset Trading Platform (VATP) regime, removing the 12-month track-record requirement for professional-investor-only assets, opening VATP distribution of investment products with virtual-asset exposure, permitting tokenised securities and stablecoins inside the VATP perimeter, and authorising VATP custody services for a wider asset set (Davis Polk client update, 3 Nov 2025). The most consequential change for institutional operators is the explicit permission for Hong Kong VATPs to integrate with global affiliate order books, which addresses the structural liquidity-fragmentation problem that has constrained Hong Kong VATP volumes since the regime started in 2023. For an APAC tokenisation operator, this is the move that converts the Hong Kong VATP licence from a narrow domestic gateway into a credible regional venue for institutional digital-asset and tokenised-securities flow, and the regulatory unlock that pairs with the Stablecoins Ordinance commencement to make Hong Kong a cohesive operating perimeter rather than a set of fragmented licensing tracks.
What the November 2025 circulars actually changed
The Davis Polk summary identifies five distinct loosenings inside what was described publicly as a single coordinated package, all directed at expanding the VATP perimeter without re-opening the underlying Securities and Futures Ordinance (SFO) framework that the VATP regime sits on top of (Davis Polk).
First, the 12-month track-record requirement for tokens admitted to professional-investor-only trading on a VATP was removed. Before November 2025, a token had to demonstrate at least 12 months of trading history elsewhere before a Hong Kong VATP could list it for professional investors. The track-record gate was the structural reason Hong Kong VATPs were systematically late in admitting tokens that institutional desks elsewhere had already integrated into their flow. Removing the gate for the professional-investor segment narrows the lag.
Second, VATPs are now permitted to distribute investment products that have virtual-asset exposure, which expands the venue type from spot trading into structured product distribution. The structural implication is that a VATP licence becomes a credible distribution channel for tokenised structured notes and tokenised exposure products, not just for the underlying tokens.
Third, the perimeter explicitly admits tokenised securities and regulated stablecoins as in-scope products. Tokenised securities under the existing SFC perimeter (regulated investment products with on-chain transferability) can now trade on a VATP, which was ambiguous in the pre-November interpretation. Stablecoins issued under the Stablecoins Ordinance perimeter are similarly admitted, which closes the gap between the Ordinance commencement (1 August 2025) and the venue-side integration that lets the licensed stablecoins actually circulate in supervised secondary markets.
Fourth, the custody services that a VATP can offer were widened to include the broader admitted-asset set. A VATP's custody licence now covers tokenised securities and regulated stablecoins as well as the original spot-virtual-asset perimeter, which simplifies the operational model for an institutional client wanting one custody counterparty across asset classes.
Fifth, and most consequentially, VATPs are now permitted to integrate with global affiliate order books for the professional-investor segment. The implication is that a Hong Kong VATP licensed under the SFC framework can route professional-investor flow into a foreign affiliate's order book and source liquidity globally rather than being capped at the Hong Kong domestic order-book depth (Davis Polk).
Why the global-liquidity integration matters
The structural problem with the Hong Kong VATP regime through 2023-2025 was that domestic order-book depth on Hong Kong-licensed venues was a fraction of the global crypto-trading market's depth. An institutional desk in Hong Kong wanting to execute a sizeable trade on a Hong Kong VATP would face execution costs (spread, slippage) materially higher than the same trade on an unregulated offshore venue. The result was that Hong Kong-domiciled institutional flow leaked offshore even though the regulatory framework was in place to keep it onshore.
The November 2025 affiliate-order-book provision targets this directly. A Hong Kong VATP can now bring in liquidity from a global affiliate, which collapses the spread-and-slippage gap with offshore venues. The structural read is that Hong Kong VATPs become operationally competitive on execution rather than just regulatorily compliant, which is the threshold an institutional desk needs in order to keep the flow on a licensed venue.
The competitive frame is partly Singapore (where MAS Digital Payment Token Service Provider licences sit alongside the broader SCS framework but the venue-side liquidity model is structurally different), partly Japan (where the FSA's stricter conduct framework on crypto exchanges has kept Japanese venue volumes structurally below Hong Kong's), partly the offshore unregulated venues. The affiliate-order-book provision is the Hong Kong move that targets the offshore-leakage problem without trying to replicate the deep-liquidity venue stack onshore from scratch.
How the changes compose with the broader Hong Kong perimeter
The November 2025 VATP loosening pairs with three other Hong Kong moves of the same period. First, the Stablecoins Ordinance commencement on 1 August 2025 and the first issuer licence awards on 10 April 2026 (HSBC and Anchorpoint) created the supply side of regulated stablecoins. The VATP perimeter now provides the demand side by admitting those stablecoins onto licensed venues. Second, the HKMA EnsembleTX launch on 13 November 2025 created the wholesale tokenised-deposit settlement layer. The VATP perimeter creates the retail-and-institutional secondary-market layer above it. Third, the SFC's April 2026 framework allowing secondary trading of tokenised SFC-authorised investment products extends the November 2025 VATP changes by providing the regulated wrapper for the tokenised-securities side.
The pattern across all four moves is that Hong Kong is sequencing the supply-side, demand-side, wholesale-settlement-side, and product-wrapper-side reforms within a single 12-month window. For an APAC operator deciding where to base a tokenisation programme that needs both institutional-quality custody and venue execution, the cumulative effect is that Hong Kong now offers a more integrated stack than was available in late 2024.
The 2026 dealer-and-custodian licensing bill in the pipeline
The November 2025 VATP loosening sits alongside a separate legislative track that the SFC and the Financial Services and Treasury Bureau (FSTB) confirmed in late December 2025: a 2026 legislative push to introduce a comprehensive Virtual Asset (VA) dealer and custodian licensing regime via amendments to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) (Coindesk, 25 Dec 2025). The dealer-and-custodian regime would close a perimeter gap that the current VATP regime does not address: VA-related dealing and custody activity outside the trading-venue context (for example, OTC dealing, dedicated custody providers operating without a trading venue, broker-dealer-style intermediation).
The structural choice to amend AMLO rather than introduce a standalone Act is significant. AMLO amendments allow faster legislative passage than a new dedicated VA Act would require, and they keep the licensing framework anchored to the AML/CFT supervisory perimeter that the SFC already operates through. The trade-off is that the activity-by-activity supervisory framework is more constrained than what a standalone Act could provide. The SFC and FSTB position is that the AMLO route fits better with the incremental-perimeter posture Hong Kong has run on digital assets through 2023-2025.
For an institutional operator the dealer-and-custodian regime is the structural piece that needs to be in place before standalone digital-asset custody (without a trading-venue wrapper) can be operated under direct Hong Kong licensing. Until the regime lands, custody-only operations need either to be held on a VATP licence (which carries trading-venue obligations the operation does not need) or under foreign licensing with Hong Kong as a service-delivery jurisdiction. The 2026 timeline is the relevant calendar checkpoint.
Cross-jurisdiction implications
Three reasons the November 2025 changes matter beyond Hong Kong's domestic perimeter. First, the affiliate-order-book provision is the regulatory innovation Singapore's DPTSP regime does not have. A Singapore-licensed exchange operating under the Payment Services Act DPTSP perimeter cannot route domestic professional-investor flow into a foreign affiliate's order book in the way a Hong Kong VATP now can. The structural read is that Hong Kong has overtaken Singapore on the venue-side liquidity dimension while Singapore retains the lead on the institutional-tokenisation infrastructure side (GL1, Project Guardian).
Second, the tokenised-securities admission on VATP closes the venue gap that has constrained tokenised-bond and tokenised-fund secondary trading in Hong Kong. The April 2026 SFC framework on tokenised SFC-authorised investment products (see HK tokenised authorised funds) provides the wrapper; the VATP admission provides the venue. The combination unlocks treasury-style use cases for HK-issued tokenised funds that were operationally hard to run before November 2025.
Third, the regulated-stablecoin admission on VATP, paired with the April 2026 HSBC and Anchorpoint licence awards under the Stablecoins Ordinance, sets the operating pattern for how a regulated HKD or offshore-CNH stablecoin actually circulates in supervised secondary markets. The pattern is HKD or CNH stablecoin issued under Cap. 656 licensing, distributed through HKMA-supervised distribution rails (HSBC's PayMe, the HSBC HK App), and traded on SFC-supervised VATPs. This is the cohesive stack that has been unavailable in any other APAC jurisdiction at this perimeter depth.
Open questions
- Whether the affiliate-order-book provision admits routing into foreign affiliates that are themselves not licensed in tier-1 jurisdictions (US, EU, UK, Japan, Singapore), or whether the SFC requires affiliate liquidity to come from a venue with comparable supervisory standards.
- The published list of Hong Kong VATPs that have moved to integrate global affiliate order books following the November 2025 circulars.
- Whether the VATP perimeter expansion to include tokenised securities triggers a re-classification of any existing SFC-authorised tokenised-fund product as VATP-tradeable, or whether the asset-side issuer needs to take a separate step.
- The timing and named-issuer scope for the 2026 VA dealer and custodian licensing bill. The Coindesk coverage references the SFC and FSTB target without naming a specific introduction date.
- Whether the Hong Kong perimeter expansion shifts any Singapore-licensed DPTSP operator into considering a parallel Hong Kong VATP licence, given the affiliate-order-book provision now favours Hong Kong on venue-side liquidity.
- Agentic commerce posture. The November 2025 circulars do not engage the question of AI-agent-controlled wallets transacting on a Hong Kong VATP, although the broader SFC conduct framework (intermediary licensing, suitability, KYC) would apply to any operator letting agents transact on the venue on behalf of beneficial owners.