FUTU(US:FUTU) Ge Long Hui·2025-07-09 05:34Core Viewpoint - The recent approval of VATP licenses by the Hong Kong Securities and Futures Commission (SFC) has led to a surge in stock prices for Chinese brokerage firms, highlighting the significance of licensing in the virtual asset trading landscape [1][2]. Group 1: License Upgrades and Market Dynamics - The upgrade of the "brokerage one license" allows firms like Guotai Junan International to offer virtual asset trading services under existing securities accounts, but it does not grant the full capabilities associated with VATP licenses [2][5]. - Several internet brokerages, including Futu Securities, have already obtained the upgraded license and launched virtual asset trading services targeting retail investors, with Futu's estimated annual trading volume reaching 500 billion HKD [2][4]. - As of July 8, 2023, the SFC has approved 42 institutions for the upgrade, with over 30 being brokerages [2][4]. Group 2: VATP License Significance - The VATP license provides a more comprehensive service capability, including virtual asset custody, trading matching, and fiat-to-crypto exchanges, which is not available under the brokerage one license [6][7]. - The application process for VATP licenses is more complex and lengthy compared to the brokerage one license, with only 11 VATP licenses currently issued by the SFC [6][8]. Group 3: Competitive Landscape and Future Prospects - Futu Group's subsidiary, Cheetah Trading (Hong Kong) Limited, is set to obtain a VATP license, which will enhance its competitive edge in the market by integrating both brokerage and VATP capabilities [7]. - The combination of brokerage one and VATP licenses is expected to create a robust ecosystem for virtual asset trading, allowing firms to offer a closed-loop service to clients [7][9]. - As the regulatory framework matures, investors are increasingly focusing on compliant trading channels, which offer advantages such as fund security, transparency, and legal protection [8][9].