Hong Kong's Securities and Futures Commission (SFC) approved the first-ever secondary market trading of publicly offered tokenized funds on October 26, 2026. Two ChinaAMC money market funds — denominated in HKD and USD, with combined assets under management of approximately $660 million — began 2...
"The global financial system stands at an inflection point, as the shift toward an always-on, 24/7 real-time market emerges as the defining structural transformation of modern finance." — Katie He, Executive Director and Head of Strategic Business, ChinaAMC (HK)
Hong Kong's Securities and Futures Commission (SFC) approved the first-ever secondary market trading of publicly offered tokenized funds on October 26, 2026. Two ChinaAMC money market funds — denominated in HKD and USD, with combined assets under management of approximately $660 million — began 24/7 trading on PantherTrade, an SFC-licensed Virtual Asset Trading Platform (VATP) wholly owned by Nasdaq-listed Futu Holdings. The approval marks the first time a major financial jurisdiction has permitted retail investors to trade tokenized fund shares on a secondary market around the clock.
The move sits within a broader Hong Kong tokenization program that now encompasses 17 SFC-authorized retail tokenized products holding $1.3 billion in AUM — up 78% year-over-year — and a government digital green bond program that has issued HK$37 billion ($4.7 billion) across four offerings since 2023. The regulatory architecture Hong Kong has built differs structurally from competing jurisdictions: a single VATP license covers both cryptocurrency and tokenized securities trading, eliminating the dual-licensing friction present in Singapore and the EU.
The economic question is whether secondary trading solves the liquidity problem that has constrained tokenized fund adoption globally, or whether it merely shifts liquidity risk from redemption windows to order books.
On October 26, 2026, the SFC authorized secondary trading of two tokenized money market funds on PantherTrade, a licensed VATP. The authorization follows a regulatory framework the SFC published in April 2026 specifically designed to pilot secondary trading of tokenized SFC-authorized funds. This is the first implementation of that framework.
Christina Choi, Executive Director of the SFC's Investment Products Division, stated: "The commencement of secondary market trading of tokenized money market funds marks an important milestone in the SFC's ongoing efforts to promote the development of Hong Kong's digital assets. This not only puts the SFC's regulatory framework into practice, but also adds 24/7 trading — an important feature — to Hong Kong's evolving tokenized ecosystem."
Previously, investors in tokenized funds in Hong Kong could only subscribe and redeem through the primary market — a process subject to dealing windows, NAV calculation cutoffs, and settlement delays. Secondary trading eliminates the redemption queue by allowing investors to trade shares directly with counterparties on the platform.
The Funds:
| Fund | Currency | AUM | Share Class | |---|---|---|---| | ChinaAMC HKD Digital Money Market Fund | HKD | ~$98 million | Class F | | ChinaAMC USD Digital Money Market Fund | USD | ~$564 million | Class F | | Combined | | ~$662 million | |
ChinaAMC (Hong Kong), a subsidiary of China Asset Management Co. with approximately $464.5 billion in group AUM, is the fund manager. The firm's tokenized product suite exceeded $800 million in AUM as of June 2026. ChinaAMC describes itself as the first Asian asset manager to offer tokenized money market funds in three currencies (HKD, USD, and RMB).
The funds have integrated HSBC tokenized deposit capabilities and completed subscription and redemption using the Standard Chartered Anchorpoint HKD stablecoin in September 2026.
The Platform:
PantherTrade received its VATP license from the SFC in January 2025 (CE Reference: BUY578). It is wholly owned by Futu Holdings (Nasdaq: FUTU), making it Hong Kong's first brokerage-incubated VATP. Futu Securities integrates with PantherTrade, creating a unified traditional finance and digital asset trading environment. Retail investors access the tokenized funds through Futu's consumer-facing Futubull application.
Steve Zeng, Managing Director of Futu Holdings, stated: "Round-the-clock trading offers greater flexibility in managing investments beyond traditional market hours."
Operational Safeguards:
The SFC mandated several protective mechanisms for secondary trading:
The closed-loop structure — where tokens trade on PantherTrade but cannot be transferred to external wallets — is a deliberate regulatory choice. It prioritizes investor protection over DeFi composability.
The SFC's April 2026 framework addressed four areas: trading channel operation, fair pricing, liquidity provision, and disclosure. The framework positions tokenized fund shares as a regulated product within the existing Securities and Futures Ordinance, not as a separate asset class requiring bespoke legislation.
Hong Kong's structural advantage lies in its licensing model. The 13 licensed VATPs can trade both cryptocurrencies and tokenized securities under a single license. In Singapore, the Monetary Authority of Singapore (MAS) requires Capital Markets Services (CMS) or Recognized Market Operator (RMO) licenses for tokenized securities, separate from digital payment token licenses. In the EU, the DLT Pilot Regime (Regulation 2022/858) creates a sandbox for tokenized securities trading but imposes market capitalization caps (EUR 500 million for equities, EUR 1 billion for bonds) and is scheduled for European Commission review in 2026, with its future uncertain.
The SFC's framework began with money market funds — the lowest-risk product category — and stated it will "consider broadening the product scope over time, after taking into consideration market developments and experience gained." This graduated approach mirrors how the SFC handled spot crypto ETF approvals in 2024.
The secondary trading approval does not exist in isolation. Hong Kong has assembled a multi-layer tokenization infrastructure:
Government Bond Issuance:
| Offering | Year | Size | |---|---|---| | 1st Digital Green Bond | 2023 | HK$800 million | | 2nd Digital Green Bond | 2024 | HK$6 billion | | 3rd Digital Green Bond | 2025 | HK$10 billion | | 4th Digital Green Bond | 2026 | HK$20 billion (~$2.6 billion) | | Cumulative | | ~HK$37 billion (~$4.7 billion) |
The fourth issuance, priced in September 2026, set the record for the world's largest digital bond. It was denominated across four currencies (HKD, RMB, USD, EUR) and settled using tokenized deposits powered by the Hong Kong Monetary Authority's Ensemble^TX infrastructure.
Retail Tokenized Product Market:
As of October 2026, 17 SFC-authorized tokenized products are available to retail investors, holding approximately $1.3 billion in AUM. This represents a 78% year-over-year increase. The product set has expanded from money market funds to include broader fixed-income products and structured vehicles.
Licensed Platform Infrastructure:
Thirteen VATPs hold SFC licenses: OSL Exchange, HashKey Exchange, HKVAX, HKbitEX, Accumulus, DFX Labs, EX.IO, PantherTrade, YAX, Bullish, BGE, VDX, and Bixin.com. Transaction volume across licensed platforms nearly tripled in Q1 2026, according to the SFC.
The global tokenized money market and treasury fund sector has grown from approximately $500 million at the start of 2024 to over $5 billion by mid-2026. The major players:
| Fund | Manager | AUM | Chains | |---|---|---|---| | BUIDL | BlackRock | ~$2.9 billion | 7 chains | | USYC | Hashnote / Circle | ~$3 billion | Multiple | | USTB | Superstate | ~$967 million | Ethereum | | BENJI | Franklin Templeton | ~$828 million | 8 chains | | ChinaAMC Digital MMFs | ChinaAMC (HK) | ~$662 million | — | | OUSG | Ondo Finance | ~$625 million | Multiple |
BlackRock's BUIDL holds approximately 40% market share. Nearly all of these products, however, operate in the primary market only — investors subscribe and redeem through the issuer or authorized dealers. Hong Kong's secondary trading model represents a structural departure: it adds a price discovery mechanism and continuous exit liquidity that primary-only funds lack.
The broader tokenized equities market reached $3.8 billion in total capitalization by October 2026, with $313 million deposited into DeFi protocols. But these operate largely in unregulated or semi-regulated environments. Hong Kong's model is fully regulated, fully retail-facing, and fully supervised.
The economic case for secondary trading rests on liquidity access. In a primary-only model, investors face dealing windows, NAV calculation cutoffs, and settlement periods (typically T+1 to T+3). A money market fund investor who needs to exit at 2 AM on a Saturday has no option.
Secondary trading solves this by creating a continuous market. But it introduces new costs:
Spread risk: Market makers must be compensated for providing 24/7 liquidity. When the underlying bond markets are closed, market makers cannot hedge positions in real time, leading to wider spreads. This is the same problem documented in 24-hour ETF trading experiments in the U.S.
Price deviation risk: Secondary market prices can diverge from NAV. The SFC's 15-second iNAV updates and deviation alerts mitigate but do not eliminate this risk. For money market funds — where NAV stability is the core value proposition — any visible price deviation may concern retail investors.
Fragmented liquidity: With only one platform (PantherTrade) initially approved for secondary trading, the order book depth is limited to that platform's user base. Multi-platform secondary trading would deepen liquidity but introduces coordination complexity.
The closed-loop design — tokens cannot leave PantherTrade — constrains the addressable market. DeFi composability, where tokenized fund shares could serve as collateral in lending protocols or liquidity pools, is explicitly excluded. This is a trade-off: regulatory clarity and investor protection at the cost of capital efficiency.
For the 16% of ChinaAMC fund assets in retail share classes, secondary trading offers an immediate benefit: continuous exit access. For the remaining 84% in institutional classes, the impact is limited.
Hong Kong is not the only jurisdiction pursuing tokenized fund trading, but it is the first to implement a fully regulated, retail-facing secondary market.
Singapore: MAS published revised tokenization guidance in November 2025, applying a "same activity, same risk, same regulatory outcome" principle. CMS and RMO licensees can operate secondary trading for tokenized securities, but no equivalent retail secondary trading of tokenized funds has launched.
European Union: The DLT Pilot Regime permits tokenized securities trading with market cap limits. The European Commission must decide in 2026 whether to convert the pilot into a permanent framework, extend it, or let it expire. No retail tokenized fund secondary trading has been approved under the regime.
United States: The SEC proposed a crypto custody framework for investment advisers on October 1, 2026, with comments due December 5. The proposal would permit state trust companies as qualified custodians and allow adviser self-custody under narrow conditions. Secondary trading of tokenized funds remains outside the current regulatory perimeter. Franklin Templeton and Ondo Finance launched 24/7 tokenized ETF trading in March and June 2026, respectively, but these operate through blockchain-native structures rather than within the traditional fund regulatory framework.
Hong Kong has built a regulated tokenization stack that now spans issuance (government digital bonds), products (17 retail-authorized funds), platforms (13 licensed VATPs), and as of October 26, secondary trading. The cumulative infrastructure represents a coordinated effort between the SFC, HKMA, and market participants — not a single policy announcement, but an iterative construction project spanning three years.
The economic value of secondary trading will be measured in spread tightness, order book depth, and whether trading volume justifies the market-making infrastructure required. For money market funds, where the yield is the product and NAV stability is the expectation, the secondary market must prove it can maintain pricing discipline during off-hours and weekends.
The first months of live trading will provide data on these questions. The SFC has positioned itself to expand product scope if the pilot succeeds and to constrain it if problems emerge. For competing jurisdictions — Singapore, the EU, the U.S. — Hong Kong's implementation provides a live case study in how regulated tokenized fund trading actually works when retail investors have access.