Race to launch Hong Kong’s first retail crypto futures ETF begins

Exchange staked fund providers are busy working towards submitting applications to launch retail-oriented crypto futures ETFs after the local regulator announced it would open the door to such products.

Being among the first to list a retail crypto futures ETF on the local bourse will be particularly critical to the success of the product, given the narrow range of permissible underlying assets outlined in a Securities and Futures Commission circular, experts said.

The announcement created “a lot of interest, a lot of noise”, according to Rocky Mui, Hong Kong-based partner at legal firm Clifford Chance who has worked closely with issuers in the ETF industry.

Richard Douglas, Hong Kong chief executive of Saxo Markets, said his company had a wide range of third-party crypto exchange traded products available to professional investors and it hoped to be able to offer a number of these to Hong Kong retail investors.

This article was previously published by Ignites Asia, a title owned by the FT Group.

The Saxo website lists a few crypto exchange traded notes and ETPs, including CoinShares’ Ethereum Tracker EUR XBT Provider and Bitcoin Tracker EUR XBT Provider ETNs, VanEck’s Bitcoin and Ethereum ETNs, and 21Shares’ Crypto Basket Index ETP.

“There are a number of crypto ETPs [on our shelf] that we believe fall into the existing definition as set forth [in the SFC circular], and as such will be submitting an application imminently,” said Douglas.

Fidelity International, which became the first large global fund firm to offer an ETP physically backed by bitcoin to Hong Kong professional investors last month, declined to share whether it had any concrete plans to apply for a retail crypto futures ETF.

The firm is keeping a close eye on the evolution of cryptocurrencies, as part of a wider exploration of the potential for digital assets, according to Emma Pecenicic, Hong Kong-based Asia Pacific ex-Japan head of digital propositions and partnerships.