The Securities and Futures Commission of Hong Kong’s Circular on intermediaries engaging in tokenised securities-related activities is an active SFC guidance circular for licensed or registered intermediaries conducting activities involving tokenised securities and related digital securities. Issued on 2 November 2023 as Ref. No. 23EC52, the circular applies Hong Kong’s existing securities-law framework to tokenised securities while setting expectations for technology, ownership, custody, disclosure and notification risks.
The circular is not a standalone token law. It treats tokenised securities as traditional financial instruments that are securities under the Securities and Futures Ordinance and that use distributed ledger technology or similar technology in their securities lifecycle. The SFC describes the core approach as “same business, same risks, same rules,” meaning the tokenisation layer does not displace public-offer regimes, conduct rules, product due diligence or suitability obligations that already apply to securities-market activity in Hong Kong.
Key provisions of the Hong Kong tokenised securities circular
Existing securities rules remain central
The SFC states that tokenised securities are fundamentally traditional securities with a tokenisation wrapper. As a result, offerings may remain subject to the prospectus regime under the Companies (Winding Up and Miscellaneous Provisions) Ordinance and the offers of investments regime under Part IV of the Securities and Futures Ordinance. Intermediary conduct in dealing, advising, portfolio management and virtual asset trading platform activity also remains governed by existing securities conduct requirements.
Technology and ownership risks require controls
The circular focuses on risks that are not usually present in conventional securities infrastructure. These include how ownership interests are transferred and recorded, whether settlement is final, how distributed ledgers handle outages or forks, and whether cybersecurity, smart contract, private-key, data privacy and business-continuity controls are adequate. The appendix lists non-exhaustive technical, legal, operational, AML/CFT and custody considerations for intermediaries to evaluate.
- Intermediaries involved in issuance remain responsible for the overall tokenisation arrangement, even where third-party service providers are used.
- Intermediaries dealing in, advising on, or managing portfolios investing in tokenised securities should conduct due diligence on issuers, vendors, service providers, token features and risk controls.
- Bearer-form tokenised securities using permissionless tokens on public-permissionless networks attract additional custody considerations, including immobilisation, segregation, private-key management, cybersecurity and custodian financial resources.
Client disclosure and distribution treatment
The SFC expects intermediaries to provide clients with clear material information specific to tokenised securities. Examples include whether on-chain or off-chain settlement is final, transfer restrictions, smart contract audits, administrative controls, business-continuity planning and custody arrangements. The circular also superseded the SFC’s 2019 Statement on Security Token Offerings for this subject area.
A major clarification is that tokenised securities are not automatically treated as complex products solely because they are tokenised. Intermediaries should assess complexity by looking through to the underlying traditional security. The SFC also removed a mandatory professional-investor-only distribution restriction for tokenised securities, while reminding intermediaries that public offers must still comply with Hong Kong’s public offering regimes or rely on an available exemption.
Status, scope and related SFC guidance
As of 17 June 2026, the circular remains listed by the SFC among its virtual-asset materials and has not been marked as superseded in the official materials reviewed for this profile. The SFC’s later 2025 VATP guidance separately allows licensed virtual asset trading platform operators to distribute tokenised securities and digital asset-related investment products, and permits associated entities to provide custody services for virtual assets or tokenised securities not traded on their platforms, subject to applicable requirements.
This profile treats Ref. No. 23EC52 as active agency guidance for Hong Kong intermediaries rather than primary legislation. It should be read with related SFC materials on tokenisation of SFC-authorised investment products, virtual asset trading platform operators and Hong Kong’s wider securities and virtual-asset regulatory framework. Related jurisdiction: Hong Kong. Related topics: securities, tokenisation, custody, disclosure and market perimeter.