Hong Kong brokerage firm Victory Securities has secured approval from the local Securities and Futures Commission to offer structured products to professionals. This makes the firm the first licensed broker in Hong Kong to offer cash-settled virtual asset structuring products. The company, which intends to launch these products by year-end, aims to offer its clients value-added solutions, allowing for additional yield on stablecoins.
The announcement is a positive development that will strengthen Hong Kong’s capacity to deal with virtual assets. Victory Securities is expected to offer other structured products soon, including products whose returns depend on the performance of cryptocurrencies to deliver possibly higher returns. These products will target investors looking for investment opportunities outside the stock exchange.
Traditional financial derivatives are more common in the structure of crypto products since they allow for adjusting the profitability of several cryptocurrencies or even a single one. These financial instruments are useful for investors' purposes, such as arbitrage and reducing risk.
Globally, the trend towards such products is growing, with firms like Grayscale Investments in the US providing crypto exposure through trusts and platforms like OKX tailoring products to different risk preferences.
Kennix Chan, executive director at Victory Securities, highlighted the current shortage of strategic investment products in the virtual asset market. He noted that the firm's new offerings would help fill this gap, supporting sophisticated investment strategies that align with regulatory standards. Victory Securities' initiative is set to enrich the investment landscape by providing structured options that meet the evolving needs of professional investors.
As Hong Kong strives to become Asia’s centre for digital assets, it is streamlining its licensing procedures for Virtual Asset Trading Platforms (VATP). SFC plans to release the first official VTAP licenses by the end of this year following a series of provisional approvals. This is being undertaken to create a strong legal framework to foster innovation without compromising market integrity.
Moreover, the Hong Kong Stock Exchange (HKEX) plans to boost cryptocurrencies by opening benchmark indices for Bitcoin and Ethereum on November 15. These indices will offer credible, standardized benchmarks that capture marketplace activity, strengthening Hong Kong’s standing as an established digital asset hub.