Baker McKenzie assisted Harvest Global Investments Limited (HGI) in the authorisation and successful listing of Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF on the Hong Kong Stock Exchange on 30 April 2024. The Firm also assisted HGI in securing approval from the Securities and Futures Commission (SFC) to provide Type 9 virtual asset (VA) asset management services. This development not only makes HGI among the first in Hong Kong to offer spot VA exchange traded funds (ETF) to retail investors, but also makes Hong Kong the first Asian city to allow retail spot virtual asset ETF tradings.
The ground-breaking approvals came just a few months after the SFC released the circular on SFC-authorized funds with exposure to virtual assets on 22 December 2023.
The Baker McKenzie team was led by Financial Services partners Karen Man and Sophia Man, with support from Samantha Lai (special counsel) and Samantha W.S. Lai (associate) and Thomas Chung (associate).
Commenting on the deal, Karen said, "This development not only paves the way for broader acceptance of cryptocurrencies into mainstream financial systems but also reinforces Hong Kong's forefront position in leading and shaping the ongoing evolution of virtual assets and the investment ecosystem. This development also exemplifies HGI's foresight in offering innovative products that meet the future demands of their clients and the investment community-at-large."
Sophia added, "What is particularly historic about these spot ETFs is that they allow in-kind subscriptions and redemptions, differentiating Hong Kong from the current US model whereby only cash subscription and redemptions are permitted."
Karen continued, "We are honored to have been part of this monumental transaction. This was a novel transaction that required the technical and professional expertise of all players involved, including most importantly, HGI, the investment manager who led the transaction, the virtual asset trading platform, the custodian, the participating dealers, distributors and market makers, the Hong Kong Stock Exchange and CCASS as well as our forward-thinking and progressive regulators in Hong Kong. We truly appreciate the opportunity to work with HGI's Digital Asset and Investment Management teams and other working parties in making this happen."