The 10 Most Significant Regulatory News for Licensed Corporations in 2025

The topics discussed in this analysis update are as follows:

A. Development Roadmap and Regulatory Update

B. Market Developments and Updates

C. Enforcement News

A. Development Roadmap and Regulatory Update

1. VA Development Roadmap - ASPIRe Roadmap in ACTION

ASPIRe refers to Pillar A (Access), Pillar S (Safeguard), Pillar P (Product), Pillar I (Infrastructure), Pillar Re (Relationships). The ASPIRe roadmap advocated by the SFC set out a plan of 12‑initiatives in a five separate pillars, to position Hong Kong as a leading, resilient virtual asset hub by:

(i) streamlining market access via clear licensing regimes for OTC trading and custody services, and attracting global liquidity,

(ii) optimizing compliance burdens while strengthening safeguards through enhanced custody, insurance, and investors onboarding/ product categorization standards,

(iii) expanding virtual asset offerings and services, safeguarding retail investors while exploring PI‑only token listings, feasibilities of VA margin financing, and staking, borrowing/ lending services under robust control guidelines,

(iv) modernizing regulatory infrastructure with enhanced reporting, surveillance, and cross‑agency, cross‑border cooperation, and

(v) empowering investors and industry through education, regulation of finfluencers, and sustained engagement to advocate fit‑for‑purpose policy making.

Adaptability and flexibility to cope with the ever-changing VA ecosystem are the indispensable attributes HK as an international financial hub should endeavor to maintain and strengthen on and on.

VA Regulatory Update relating to ASPIRe roadmap - Alleviating the grip on staking services Stepping in Q2, further relaxations were seen in lifting the ban on staking services offered by licensed corporations. The SFC issued two circulars providing regulatory guidance on staking services for licensed VATPs and SFC‑authorized VA Funds. The VATPs are allowed to expand the product services offered which align with the Pillar P (“Product”) in the ASPIRe roadmap. VATPs interested in providing staking services have to acquire SFC’s prior written approval, and be subject to specific conditions under the Terms and conditions for providing staking services”. In another circular, the SFC-authorized VA funds are allowed to stake their virtual asset holdings only through SFC-licensed VATPs or authorized institutions subject to a cap; notwithstanding this, prior consultation and approval from the SFC are also required.

VA Regulatory Update relating to ASPIRe roadmap Pillar A (“Access”) - Further step forward with the launch of global liquidity and diversified offerings The SFC’s new circulars mark a major move toward enabling SFC-licensed Virtual Asset Trading Platform (“licensed VATP”) operators to access global liquidity through a shared order book arrangement. It allows licensed VATPs to combine orders with affiliated overseas VATPs (“OVATPs”) into a single liquidity pool, facilitating cross‑platform order matching and execution. To achieve this, OVATP must be licensed in its own jurisdictions, and comply with strict trading, settlement, and market surveillance requirements. On the trading side, the licensed VATPs are permitted to offer trading in VAs without a 12-month track record for professional investors as previously required. The SFC also proposed to amend the standard set of licensing conditions to facilitate the distribution of digital asset-related product and tokenized securities, playing a role to navigating the market participants to accomplish the ASPIRe roadmap as it advocated and envisaged.

2. Kick-off Game of the Hong Kong Stablecoin Regime

The HKMA's stablecoin licensing regime under the Stablecoin Ordinance came in to effect on 1 August 2025, with a bundle of AML/CFT guidelines, explanatory notes for licensing and transitional provisions for pre-existing issuers (“PEI”s). PEIs conducting regulated stablecoin activities before this date must submit license applications, declarations, and undertakings by the deadline on 31 October 2025 in order to be granted the "Application Submitted and Acknowledged" status to continue operations until 31 January 2026. PEIs who missed the deadline, or whose application is rejected, refused, or withdrawn, should enter a closing down period.

3. New Guidance in IPO subscription & segregation of client money

In a circular in March, the SFC outlined regulatory expectations following a review of licensed corporations’ (“LC”s) credit risk management practices in IPO financing and subscription activities. Findings of the review indicated deficiencies such as weak credit assessments, excessive leverage, inadequate liquidity planning, and improper segregation of client monies. To address risks from these lenient credit control measures, the SFC requires LCs to adopt stricter financial capability assessments, collect a minimum of 10% upfront deposits for IPO subscriptions, and perform thorough liquidity and financing capacity reviews before extending any IPO loans. LCs are expected to ensure strict compliance of proper segregation of client deposits not placed with designated banks, and satisfy the Financial Resources Rules (“FRR”) requirements in computing liquid capital. Viability to sustain a business and compliance to remain competent is like a pendulum which needs to swing to sustain the momentum rather than staying at either side.

4. Roadmap for the Global Fixed Income and Currency hub

In September, the SFC and HKMA’s jointly announced Roadmap for the Development of Hong Kong’s Fixed Income and Currency (“FIC”) Markets sets a structured plan with four procedural pillars and ten initiatives to strengthen Hong Kong’s role as a global FIC hub. The roadmap first reinforces market foundations by Boosting Primary Market Issuance through greater government bond supply, targeted promotion to global issuers and investors, and expanding the investor base to funds, family offices, and corporates. It then Enhances Liquidity in the Secondary Market by completing the OTC derivatives regulatory regime and developing a repo central counterparty. Under “Breaking New Ground,” the roadmap seeks to Expand Offshore RMB Business by broadening RMB usage and improving Connect schemes to deepen liquidity and product diversity. Lastly, it comes to building Next-generation Infrastructure, including modernizing core market systems, supporting enhanced electronic trading platforms, and facilitating tokenization and innovation in FIC products. A Roadmap is commonly adopted as a tool to navigate evolution of a new regime.

B. Market Developments and Updates

5. NASDAQ is pioneering in launching tokenization of stocks

The tokenized securities market exhibited an explosively growth in less than two years with on‑chain stocks jumping from under US$5 million in 2024 to about US$420 million, driven by competition between crypto‑native firms and major traditional financial institutions to secure the first‑mover advantage. This competition also gave fuel to a potential revolution against the traditional exchange models, and Nasdaq, being the world’s second-largest exchange, took the initiative to incorporate tokenized stocks to push itself to be the pioneer in the Wall Street. Actually, tokenized stocks are merely new “packaging” for the traditional equity connected on blockchains with enhanced settlement efficiency and transaction time & accessibility. To put in simple words, NASDAQ is not trying to do away with the old order, but rather to upgrade the underlying structure of the market with minimal impact and to ensure that the core principles of investor protection and market transparency remain intact.

6. TECH launched to facilitate listing application

The SFC and HKEX have launched the technology enterprises channel (“TECH”) to support prospective Specialist Technology Companies (“STC”) and Biotech Companies (“BTC”) with facilitating measures for application which includes: a designated experienced team to help in filing the Main Board Chapters 18A and 18C applications, engagement for better understanding, providing guidance on eligibility & suitability for listing etc. The TECH channel is strategically vital for Hong Kong's financial hub status. By providing pre-application guidance and confidential submissions tailored specifically for high-potential, high-risk specialist tech and biotech firms, TECH directly addresses a critical market gap. This significantly enhances Hong Kong's attractiveness and competitiveness against global rivals.

7. Collaborated efforts across the border to curb unauthorized accounts opening residents from mainland CHINA

There was news circulated in media reports in China showing intensified regulatory enforcement to curb with unauthorized use of Hong Kong securities accounts for cross-border trading by clients with origins of residence from mainland Chinese. Under guidance from mainland regulators, Hong Kong-based brokers—including Futu Securities, Tiger Brokers, Long Bridge HK, and Valuable Capital—have strengthened account-opening standards for mainland-origin clients. Since June last year , many firms have relinquished the prior “Proofs of Existing Accounts” (“PEA”) method, which allowed account openings based on ownership of overseas securities accounts, and replaced with the principle of “Proofs of Life & Work” of cross-border residence or employment (e.g., utility bills or leases). This regulatory shift effectively closed loopholes enabling mainland investors (residents) without actual presence to open accounts in Hong Kong, signaling collaboration & supervision between mainland and Hong Kong authorities to curb unapproved cross-border investment activities.

8. The Fall of an Empire: Prince Group's Dramatic Downfall in 2025

In the shadowy world of international finance and cybercrime, 2025 delivered a blockbuster scandal straight out of a thriller novel. At the center stood the infamous Prince Group (太子集團), the sprawling Cambodian conglomerate founded by the enigmatic Chen Zhi (陳志). Once hailed as a powerhouse in real estate, banking, and more, the group crumbled under the weight of explosive allegations: operating vast "telecom fraud parks" in Cambodia, where scammers allegedly preyed on victims worldwide through pig-butchering schemes and other digital cons. The drama escalated when US authorities slapped Chen Zhi with sanctions and prosecution, freezing a staggering HK$120 billion in Bitcoin assets—equivalent to a fortune that could rival some nations' GDPs. This wasn't just a slap on the wrist; it exposed a web of deceit that spanned continents, drawing in Hong Kong's regulators like a magnet.

Enter the SFC's iron fist: In a swift crackdown, licenses for two Prince Group-linked entities were suspended, effectively halting their operations in Hong Kong's financial arena. Mighty Divine Securities Limited, licensed since 3 March 2021 and Mighty Divine Investment Management Limited (CE: BCQ145) were slapped with "Licence suspended" and "Ceased business of regulated activities" notations by 3 November 2025.

Spillover effects continued with market watchers glued their eyes to Hong Kong-listed stocks tied to Chen Zhi: Geotech Holdings Ltd. (01707.HK) and Khoon Group Ltd. (00924.HK) saw wild fluctuations amid the fraud buzz.

Then came the bombshell resignation: LI Thet (李添), Prince Group's CFO and chairman of FSM Holdings (01721.HK), stepped down on 21 October 2025, after facing his own US sanctions for alleged money laundering and large-scale cash smuggling. This revelation unmasked a third listed company in the tangled net, proving the scandal's reach was deeper than anyone imagined.

C. Enforcement News

9. The first solicitor convicted of breaching secrecy provision by the SFC

On the day of conviction at the Eastern Magistrates’ Courts, the solicitor (TSE Yin Fung) was fined HKD25,000 and ordered to cover the SFC's investigation costs. As the legal representative for an individual, the solicitor had received confidential information related to a restriction notice issued by the SFC, which was protected under the SFO's secrecy rules. Despite this, he disclosed the sensitive details to two other individuals on 9 February 2021, leading to the charges. This marks the first occasion in which a Hong Kong practicing solicitor has been convicted of an offence for contravening the secrecy provision under the SFO.

10. An unprecedented collaboration between SFC and HKEX

HKEX took its first-ever disciplinary action against two former directors of the Listco (6928.HK) for failing to cooperate with investigations conducted by both the SFC and the HKEX. On 12 August 2025, the HKEX publicly censured executive director (Ma Xiaoqiu) and non-executive director (Jin Lailin) deeming them unsuitable for future directorial or senior management roles at the Listco or its subsidiaries. This stemmed from their non-responsiveness to inquiries by the SFC and probes into Listing Rules compliance by the HKEX's Listing Division, even after their tenure had ended. The case arose amid broader investigations into potential SFO violations involving Listco and related parties, with the SFC issuing section 183 notices for information and documents. The HKEX's Listing Committee determined that their lack of cooperation constituted a severe breach of ongoing obligations under the Listing Rules.

[End of ComplianceOne's Summary – The 10 Most Significant Regulatory News for Licensed Corporations in 2025]

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