Ed Jones

Buying and selling an SFC-authorised retail fund on a trading platform at 3am on a Saturday is now possible in Hong Kong.

The Securities and Futures Commission (SFC) said on Monday (the 26th) that it had approved the first tokenised funds offered to the public anywhere in the world for secondary-market trading on an SFC-licensed virtual asset trading platform (VATP). The first two products are both existing SFC-authorised tokenised money market funds: the ChinaAMC Hong Kong Dollar Digital Money Market Fund and the ChinaAMC US Dollar Digital Money Market Fund. Both are available for round-the-clock trading with immediate effect.

China Asset Management (Hong Kong)'s partner platform is PantherTrade, the licensed platform wholly owned by Futu Holdings (Nasdaq: FUTU). Subject to the platform's rules, retail investors can trade tokenised units of the two funds 24 hours a day, 365 days a year, including weekends and public holidays. Trading will initially be conducted in Hong Kong dollars and US dollars respectively.

Trading money market funds, not cryptocurrencies

The products being opened to round-the-clock trading are not cryptocurrencies. Cryptocurrencies on licensed platforms have already been tradable 24/7. What is being opened up this time is trading in money market funds. He Rui, executive director and head of strategic business at China Asset Management (Hong Kong), said the tokenised structure enabled 24/7 trading, while the underlying assets, risks and related exposures were exactly the same as those of traditional money market funds.

The ChinaAMC Hong Kong Dollar Digital Money Market Fund was launched in February 2025. It was already the first tokenised fund in the Asia-Pacific region aimed at retail investors, with subscriptions available through licensed platforms including OSL (0863.HK). The new development is not the fund itself, but the addition of a secondary-market trading channel.

24/7 trading applies only to the secondary market; subscriptions and redemptions unchanged

Wu Junyu, director of digital asset business at China Asset Management (Hong Kong), explained that trading in the secondary market involved already-issued fund units changing hands between buyers and sellers, rather than each transaction being a subscription or redemption with the fund. As a result, the fund does not need to buy or sell underlying assets in sync with every transaction, allowing units to be traded outside traditional market hours. He stressed that round-the-clock service applied only to secondary-market trading, while subscriptions and redemptions in the primary market would continue to follow the fund's offering documents.

ChinaAMC calls the arrangement a "dual-track mechanism": secondary-market trading provides circulation for the units, while primary-market subscriptions and redemptions serve as a liquidity backstop.

The design takes reference from the model used by exchange-traded funds (ETFs). On April 20 this year, the SFC issued a circular to pilot the framework, requiring tokenised funds to be traded on licensed platforms through an automated matching system and setting requirements covering trading-channel operations, fair pricing, liquidity provision and disclosure. Two of the safeguards are:

  • The platform must alert investors when the transaction price deviates significantly from the real-time or near-real-time indicative net asset value (iNAV).
  • The platform must inform investors that they may subscribe to or redeem units in the primary market at net asset value.

According to reports, PantherTrade's service also includes a five-minute cooling-off period.

In other words, the secondary-market price may trade at a discount or premium to the fund's net asset value. That is the cost of round-the-clock liquidity, and a risk investors need to bear in mind.

It is the units that change hands faster, not the fund's valuation

Traditional retail funds generally require orders to be placed before the cut-off time on a trading day, with pricing based on that day's net asset value and settlement completed several business days later. ChinaAMC said the new service overcame the restrictions of fixed trading hours and multi-day settlement cycles for traditional public funds. However, what has been accelerated is the transfer of units; the fund's valuation method and subscription and redemption cycles remain unchanged.

For comparison, US equities moved from T+2 to T+1 settlement in May 2024, while Hong Kong stocks remain on T+2.

The SFC also said tokenised funds could eventually work with tokenised deposits being developed by the SFC and the Hong Kong Monetary Authority under Project Ensemble. This would allow tokenised funds and tokenised money to interact on a digital track and support more efficient transaction settlement. The implication is that using tokenised money to settle the cash leg remains a next step.

Who will be affected?

He Rui said the product could meet the needs of treasury management companies operating across time zones, while giving retail investors who need to allocate funds immediately another option. When PantherTrade became fully operational in March this year, it said it would connect with Futu Securities to provide trade matching, custody and technical infrastructure.

The impact at industry level remains to be seen:

  • If round-the-clock secondary-market operations run smoothly, traditional distribution channels that rely on manual subscription and redemption processing could face competition.
  • Licensed platforms that have traditionally focused on cryptocurrency trading could use the opportunity to introduce lower-volatility regulated products.
  • Banks with custody and compliance experience could play a role in the custody and transfer-agency businesses for tokenised funds. The related revenue, however, will depend on trading volumes.

What does "world first" mean?

The SFC's description of the initiative as a world first refers specifically to "tokenised funds offered to the public and traded on a licensed platform in the secondary market". US spot Bitcoin ETFs were approved for listing as early as January 2024, but are a different type of product. The Financial Conduct Authority's consultation on fund tokenisation in October 2025 focused mainly on improving primary-market efficiency rather than secondary-market trading on a platform.

What comes next?

The SFC said the first products would focus on tokenised money market funds. It will closely monitor the related trading activity and consider expanding the product range in due course, taking into account market developments and experience gained. He Rui said tokenised money market funds were only the first step, with future expansion into asset classes such as bonds and commodities, as well as deeper integration with regulated stablecoins and central bank digital currencies.

Three areas will be worth watching over the coming months:

  1. Whether the secondary market becomes active. The key indicators will be trading volume and the size of any premium or discount to iNAV. If buy and sell orders are thin, the system may have limited appeal even if it is workable.
  2. When the product range expands. This includes when the SFC approves products beyond money market funds and whether other asset managers that have launched tokenised money market funds follow suit. For example, CSOP Asset Management announced in June this year that it would launch a tokenised share class of a money market fund with HSBC and bring it online in partnership with OSL.
  3. Whether the settlement method changes. Trading will initially be conducted in Hong Kong dollars and US dollars. Whether licensed stablecoins or tokenised deposits are introduced for settlement will determine whether "round-the-clock" trading can be extended to the cash leg.