Enhancements to the Certified Virtual Asset Platform (CVAP)
Recent discussions between the Hong Kong Securities and Futures Commission (SFC) and industry leaders have resulted in significant commitments aimed at enhancing the Certified Virtual Asset Platform (CVAP) qualification process. Local reports reveal that these agreements followed a meeting with members of the Hong Kong Securities and Futures Professionals Association, which included notable figures such as Deputy Secretary for Financial Services and the Treasury, Joseph Chan Ho-lim, and Ye Chi-heng, Executive Director of the SFC’s Intermediaries Division.
Key Changes to the CVAP Examination
A key change will see the CVAP examination decoupled from the prerequisite training course, allowing candidates to take the exam independently without first completing the mandatory instruction. Additionally, the SFC intends to provide more accessible study materials and lower the exam fees to align them with the costs associated with existing Paper 2 and Paper 3 licensing exams.
The Certified Virtual Asset Practitioner qualification is viewed as an essential credential for professionals within Hong Kong’s burgeoning digital asset market, governed by standards set forth by the SFC and administered by the Hong Kong Securities and Investment Institute (HKSI). The program equips individuals with essential knowledge of blockchain technologies, digital asset products, and compliance measures related to anti-money laundering (AML).
Concerns Over Regulatory Changes
During the meeting, the association expressed its concerns over recent changes to the regulatory landscape for virtual assets, particularly the elimination of the previous 10% minimum exemption for asset management. They highlighted that the swift implementation of new rules, without a graduated transition period, has led to increased uncertainty for firms either entering the sector or already operating within it.
They stressed that many of the recent regulations are broad and lack detailed direction, complicating compliance efforts for businesses involved in virtual assets.
Governance and Future Engagement
The governance of the CVAP examination was also brought into question, with inquiries about whether its framework underwent formal approval from the SFC’s board, given its significance for licensed professionals. Although the SFC did not address this directly, it noted that the examination process is conducted under powers granted by the Securities and Futures Ordinance to elevate professional standards, encouraging current license holders to participate in the exam as soon as feasible.
Looking ahead, the association indicated it will continue to engage with the SFC and the Financial Services and the Treasury Bureau regarding ongoing operational challenges. This includes the provision of clearer guidelines for private funds regarding self-custody options and better delineation of regulatory jurisdictions between technology service providers and licensed entities.
Operational Adjustments and Licensing Clarity
They suggested operational adjustments for licensed virtual asset trading platforms, such as diversifying hardware encryption options and adjusting insurance requirements. Furthermore, they called for a clearer framework that distinguishes technology service entities from activities requiring regulation, arguing that businesses not involved in asset handling or commission collection should not automatically face licensing demands without precise classification criteria.
Addressing Staffing and Approval Timelines
Addressing the increasing demand for virtual asset licenses, the SFC acknowledged their staffing difficulties, which have resulted in uncertainty regarding the timelines for application approvals. In light of this, the association has urged the SFC to publish more transparent processing timelines and guidance based on specific milestones to assist candidates in managing staffing and capital strategies.
Future of Virtual Asset Regulation in Hong Kong
The discussion also pressed for a quicker approval process for virtual asset derivatives, as Hong Kong retail investors currently only have limited access to five spot cryptocurrencies—Bitcoin, Ether, Avalanche, Chainlink, and Solana—without options for regulated hedging products.
These developments come at a time when Hong Kong is actively broadening its regulatory framework for virtual assets. Earlier this year, initiatives were announced to establish licensing for virtual asset advisory and management services, aimed at expanding oversight beyond traditional trading platforms and custody services. The government has indicated that legislation related to trading, custody, advisory, and management will be progressively implemented, alongside a regulated framework for stablecoins, with the first licensed stablecoins anticipated to circulate by mid to late 2026.
