LTP secures key regulatory licenses in Hong Kong for Virtual Asset Prime Brokerage offering

In this post:

• LTP, an institutional prime brokerage firm, announced that its subsidiary LiquidityTech Limited (LTP HK) acquired five types of HK SFC licenses.
• The newly acquired licenses will allow LTP HK to deal in securities and futures contracts, advise on securities and futures contracts, and manage assets.
• LTP HK became the first prime brokerage focused on virtual assets to secure a comprehensive suite of HK SFC licenses.

LTP announced today that its subsidiary LTP HK had secured types 1, 2, 4, 5, and 9 licenses from the Hong Kong Securities and Futures Commission (HK SFC). LTP HK became the first prime brokerage to deal in securities and futures contracts, advise on securities and futures contracts, and manage assets.

LTP disclosed that LTP HK was now licensed to offer a range of financial services to institutional clients, including proprietary trading firms, hedge funds, asset managers, and corporate investors. According to LTP, the regulatory achievement solidified LTP HK’s credibility and leadership within the dynamic financial services landscape.

Jack Young, the founder and CEO of LTP, said regulatory compliance was the ‘fundamental pillar’ of the firm’s institutional prime brokerage services. He added that LTP was committed to serving institutional clients who demanded secure high-performance trading infrastructure. 

LTP HK increases its financial service offerings with new HK SFC licenses 

LTP announced that its Hong Kong subsidiary, LTP HK, had gained approval for a type 1 HK SFC license, which allowed the company to deal in securities. LTP HK also received type 2 licensing, allowing it to deal in futures contracts. Types 4 and 5 licenses authorized LTP HK to advise on securities and futures contracts, respectively. The type 9 SFC license allowed LTP HK to engage in regulated asset management. 

HK SFC recently announced its swift licensing process and revamped the second phase of its assessment of virtual asset trading platforms (VATPs). The agency disclosed that its proactive engagement and enhanced communication with VATPs to provide direct and effective guidance on its expected regulatory standards were key to the swift licensing process. 

LTP stated that the LTP HK’s approvals from the HK SFC aligned with the company’s commitment to regulatory compliance, institutional-grade services offering, and investor protection. 

“This regulatory milestone marks a strategic leap forward in our mission to bridge traditional finance with digital asset innovation.”

-Ethan Wang, CEO of LiquidityTech Limited (LTP HK)

Wang added that LTP HK was set to empower institutions with compliant customer-protected solutions that drove growth in evolving markets as Hong Kong cemented ‘its role as a global hub for financial innovation.’ The HK SFC had earlier identified various deficiencies and substandard conduct during the course of its supervision of licensed corporations engaged in asset management.

Hong Kong SFC streamlines licenses for virtual asset managers

The HK SFC recently published a circular detailing a new streamlined licensing process that now applies to all new applicants for a virtual asset trading platform (VATP) license. The single external assessment conducted after the applicant had implemented all its internal systems and controls replaced the two-phased external assessment previously required.

Previously, applicants for virtual asset trading platform licenses–under the HK SFC’s Scope of External Assessment Reports published in June 2023–were required to engage an external assessor to submit two assessment reports to the SFC. The phase 1 report was submitted with the license application, and the effectiveness of the design of the license applicant’s proposed policies was assessed. The phase 2 report was submitted by an external assessor after the SFC granted approval-in-principle of the virtual asset trading platform license application and assessed the effectiveness of the policies, procedures, and the systems and controls actually implemented. External assessors are required to submit only one assessment report under the new streamlined licensing process.

HK SFC confirmed that assessment was required to ensure that a VATP applicant’s systems and controls, policies, and procedures were suitably designed and implemented to meet the requirements of the SFC’s VATP and AML/CFT guidelines. The circular contained no details of the required terms of reference, scope, and specific areas to be covered by the single assessment report. According to the HK SFC, these details were available in the now defunct Scope of External Assessment Reports.