Core Viewpoint - The Hong Kong Financial Services and the Treasury Bureau and the Securities and Futures Commission have proposed a licensing regime for virtual asset trading and custody service providers, marking a significant step in establishing a regulatory framework for digital assets in Hong Kong [1][2]. Group 1: Licensing Regime - The proposed licensing regime for virtual asset trading service providers will align closely with the existing regulatory framework under the Securities and Futures Ordinance, specifically for traditional securities trading activities [2]. - The licensing regime for virtual asset custody service providers will focus on managing risks associated with the custody of clients' virtual asset private keys, enhancing the security of client assets [2]. Group 2: Public Consultation - A two-month public consultation completed in August received 101 and 93 submissions regarding the proposed licensing regime for virtual asset trading and custody service providers, respectively, from market participants, industry organizations, and professional groups [1]. - The majority of respondents expressed support for expanding the regulatory scope to include virtual asset trading and custody services following the implementation of the licensing regime in June 2023, viewing it as crucial for the sustainable development of Hong Kong's digital asset ecosystem [1]. Group 3: Regulatory Framework Development - The Secretary for Financial Services and the Treasury emphasized that establishing a licensing regime for virtual asset service providers is a vital step in enhancing the legal framework for digital assets, balancing market development, risk management, and investor protection [2]. - The CEO of the Securities and Futures Commission highlighted significant progress in building a regulatory framework for virtual assets, aiming to ensure Hong Kong remains a global leader in the digital asset market [2].

Group 1 - The core theme of the upcoming Policy Address by the Chief Executive of Hong Kong is expected to focus on economic transformation, with Deloitte proposing measures to enhance market liquidity and improve the innovation ecosystem [1] - Deloitte emphasizes Hong Kong's critical role in global capital flow, technological innovation, and national development, urging continuous progress and adaptation to serve national needs and promote sustainable growth [1] Group 2 - Deloitte suggests targeted measures to strengthen Hong Kong's financial services sector, including enhancing stock market liquidity and attracting new economy companies to list in Hong Kong [2] - Specific recommendations include extending trading hours for the Hong Kong stock market, expanding the investor base for Stock Connect, and optimizing tax policies to attract international companies for dual listings [2] - The proposal includes a phased extension of trading hours, initially extending the closing time to 6 PM, with future considerations for 24-hour trading to attract global investors [2] Group 3 - To attract more new economy companies, Deloitte recommends broadening the definition of "innovative industries," relaxing voting rights restrictions for "same share different rights" companies, and adjusting the thresholds for secondary listings [3] - Deloitte also suggests expanding the scope of confidential applications under the "Technology Enterprise Fast Track" and introducing a new "Overseas Company Listing Fast Track" to support companies already listed abroad [3] Group 4 - Deloitte highlights the importance of developing a digital asset ecosystem in Hong Kong, focusing on areas such as fintech, healthcare, logistics, and construction for targeted investment [4] - The firm recommends expanding the regulatory sandbox to include advanced applications like eVTOL and AI traffic management, promoting infrastructure for vertical take-off and landing facilities, and integrating low-altitude infrastructure into urban planning [4] - Collaboration with other cities in the Greater Bay Area is suggested to explore financial innovations and enhance market liquidity, alongside exploring the compliant use of stablecoins to support mainland enterprises in global expansion [4]