The Hong Kong Securities and Futures Commission (SFC) has officially permitted licensed cryptocurrency exchanges to integrate with the global order books of their foreign affiliated platforms. This innovation aims to enhance liquidity and improve pricing mechanisms for digital asset market users in Hong Kong.
This is reported by Finway
New Rules to Enhance Liquidity
According to the updated requirements from the regulator, local crypto exchanges can now pool liquidity with foreign subsidiaries, allowing traders to access deeper order books, better prices, and reduced spreads.
“The new rules provide for the pooling of liquidity between licensed trading platforms in Hong Kong and their foreign affiliates. This way, traders will be able to access deeper order books, better prices, and reduced spreads,” the press release states.
Previously, all transactions on Hong Kong’s crypto exchanges had to be conducted solely within the jurisdiction and pre-funded. The introduction of the Shared Order Book allows some operations to be conducted with counterparties outside of Hong Kong, expanding opportunities for the market.
Security Requirements and SFC Oversight
Integration with global order books is only possible after obtaining written approval from the SFC. Exchanges are required to implement effective measures to manage operational and settlement risks, as well as to ensure the prevention of market abuses. Only after meeting these conditions does the regulator grant permission to connect to international liquidity pools.
Additionally, Hong Kong’s financial authorities continue to refine the regulatory landscape: recently, the Hong Kong Monetary Authority (HKMA) mandated the disclosure of the identity of each stablecoin holder, aimed at increasing market transparency.