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SFC grants OSL exchange preliminary license

Hong Kong’s SFC gives the preliminary green light to OSL’s bid to operate a virtual asset exchange.

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OSL, an Asian digital asset platform and member of Hong Kong-listed BC Technology Group, has received an approval-in-principle for its application to operate a virtual asset trading platform under a license for Types 1 (dealing in securities) and Type 7 (automated trading service (ATS)) regulated activities under the Securities and Futures Commission virtual asset licensing framework in Hong Kong. 

Once the conditions for final approval are satisfied, the license will permit OSL to operate a brokerage and automated trading service for digital assets, including security tokens. The company is on track to become the world’s only publicly listed, licensed, insured and Big-4 audited digital asset platform.

This follows the November 2019 announcement by the SFC of its ground-breaking regulatory framework for digital asset trading platforms that included requirements on hot and cold digital wallet insurance, client asset segregation, know-your-customer, anti-money laundering, maintenance of orderly markets and other digital asset-specific controls.

“Securing approval-in-principle for a virtual asset trading platform license in Hong Kong, inclusive of security tokens, underscores our commitment to comprehensively addressing the demands of institutional investors,” said BC Group CEO Hugh Madden. 

“Until now, traditional finance has been observing this asset class with interest, but lack of regulatory clarity has so far discouraged participation,” said Madden. “Licensing is a game-changer, because it provides certainty and confidence to investors, unlocking massive participation as it drives the increasing use of our platform by the global institutional investor community.”

The SFC framework continues to be the only licensing framework within the top international financial centers that fully integrates the specific requirements for digital asset platforms alongside traditional rigorous securities regulations. Because of this unique integrated framework, clients of a Hong Kong licensed digital asset trading platform can enjoy all the protections and safeguards they have become accustomed to in traditional finance, and can also take comfort in additional protections under the new regime that have been tailor-made for the new asset class. 

OSL CEO Wayne Trench added: “Recent global regulatory developments, emerging sovereign digital currency trials and increasingly cashless societies, exemplify that digital assets are today’s reality and not some distant dream.”

The OSL digital asset platform business experienced exceptional growth and performance in 2019, and in the first half of 2020. In its interim results announcement on 12 August 2020, BC Group stated it had experienced a year-on-year revenue increase of 47%, driven mainly by record annualized trading volumes of US$28 billion achieved during the first six months of the year.

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SFC grants OSL exchange preliminary license