On April 20, the Hong Kong Securities and Futures Commission (SFC) officially released a regulatory framework for secondary market trading of tokenized investment products. On the surface, this appears to be an update to the regulations governing "tokenized fund trading," but from a structural perspective, its significance extends far beyond product-level expansion; it represents a fundamental restructuring of the securities market's trading mechanism. This time, Hong Kong is not discussing "whether to allow tokenization," but rather answering a more crucial question: once an asset is tokenized, can it be continuously priced, traded, and circulated like stocks? The regulator has provided a clear answer to this question. From "on-chain wealth management" to "digital securities": prior to this new regulation, Hong Kong's tokenized products were essentially still in the "structural innovation" stage. Investors could subscribe to or redeem tokenized funds through compliant channels, but the entire process still relied on traditional financial logic—no continuous pricing, no matching transactions, and no real market liquidity. This meant that so-called "tokenization" was more of a change in issuance format than an upgrade to the market structure. The core breakthrough of this regulatory framework lies in the formal opening of the secondary market trading mechanism: tokenized investment products approved by the Securities and Futures Commission (SFC), especially open-ended funds, will be traded on licensed virtual asset trading platforms, while off-exchange secondary market trading arrangements will be explored on a case-by-case basis. This change in definition is of watershed significance. It means that tokenized funds are no longer "on-chain held financial products" but are substantially included in the category of tradable digital securities, and their trading logic begins to align with standardized securities products such as ETFs and LOFs. In other words, Hong Kong has accomplished something that no other major global financial market has done before: shifting fund products from "subscription and redemption driven" to "trading driven." The real change lies in "how to trade": simply opening up trading does not constitute a systemic breakthrough. The real key is that Hong Kong has not chosen a "crypto market path" but insists on incorporating tokenized trading into the traditional financial regulatory system. This framework explicitly proposes to establish four core mechanisms based on the operating rules of ETFs and licensed virtual asset trading platforms: fair pricing, orderly trading, liquidity provision, and information disclosure. Its underlying logic is a typical "same risk, same regulation." This means that on-chain transactions do not signify a relaxation of regulation, but rather a migration and extension of regulatory standards. This constitutes the most fundamental difference between the Hong Kong model and other markets.The End of Financial Time Rules: The most widely disseminated statement in this policy is "allowing nighttime and weekend trading." However, understanding this change solely as "extended trading hours" underestimates its significance. The reason traditional securities markets have fixed trading hours is not fundamentally due to investor behavior, but rather to the limitations of the underlying infrastructure—exchange matching, clearing system operation, and bank settlement networks all rely on a linear time structure. In the new framework, regulators have explicitly stated for the first time that they will explore the application of regulated stablecoins and tokenized deposits in transaction settlement. This change directly targets the most crucial aspect of the trading system—the clearing mechanism. In the traditional system, there is a natural time difference between trading and settlement (T+1 / T+2), which not only affects capital efficiency but also brings credit risk and liquidity discounts. In the on-chain system, settlement based on stablecoins and tokenized deposits can be completed near real-time, making "trading as settlement" possible. When clearing is no longer constrained by bank system time, the existence of trading hours itself becomes unnecessary. Therefore, the so-called "7×24-hour trading" is essentially not an extension of market time, but the disappearance of the institutional constraint of trading hours. A Triple Restructuring of Liquidity, Efficiency, and Investor Structure: Beyond changes at the mechanism level, the far-reaching impact of this policy will be reflected in the reshaping of market structure. First, the liquidity structure. In the absence of a secondary market, tokenized funds have long faced the problem of "being able to buy but not sell," with their liquidity relying on redemption mechanisms rather than market transactions. This directly limits the price discovery ability and capital turnover efficiency of assets. With the introduction of a secondary market, continuous pricing and market-making mechanisms will be gradually established, and assets will shift from "static holding" to "dynamic circulation." Second, capital efficiency. On-chain instant settlement will significantly shorten the capital occupation cycle, allowing capital to participate in more transactions within the same time window, thereby improving the overall market turnover rate. This change is particularly crucial for low-risk assets such as money market funds, whose return structure already depends on capital utilization efficiency. Third, the investor structure. The new regulations clearly state that related products will be open to public investors, meaning that tokenized assets have truly opened up retail access for the first time. In the traditional financial system, high-quality assets are often preferentially allocated to institutions, but in the on-chain trading environment, changes in information transparency and access mechanisms may reshape this allocation logic. Regulators are betting on "scaling up": This policy is not a pre-planned move, but rather a confirmation of the existing market conditions.As of March 2026, Hong Kong had issued 13 tokenized products, managing HK$10.7 billion, representing a roughly sevenfold increase within a year. The significance of this data lies not in the scale itself, but in its demonstration that tokenization has successfully transitioned from "feasibility verification" to "capital support." At this critical juncture, if the trading mechanism remains rooted in primary market logic, tokenization will inevitably face liquidity bottlenecks; however, once the secondary market is opened, liquidity will drive issuance expansion in the opposite direction, creating a structural positive feedback loop. In other words, the introduction of this regulatory framework is essentially a confirmation by regulators of a judgment: tokenization is no longer a pilot program but has the potential to become market infrastructure. The uniqueness of Hong Kong's approach: From a global perspective, Hong Kong is building a highly unusual regulatory combination, differing from Singapore's prudent approach focused on institutional pilots, the Middle Eastern market's emphasis on flexible regulatory restructuring, and the weak regulatory model of offshore trading platforms. Hong Kong is attempting to achieve a combination of these three elements: a legitimate financial regulatory framework, Web3 technology infrastructure, and a fully open market for retail investors. At the current stage, this combination has almost no direct counterparts. Its advantage lies in institutional certainty and market trust, while its cost is higher compliance thresholds and a slower pace of innovation. However, in the long run, this path is more likely to attract large-scale capital and mainstream financial institutions. It's not a new product, but a new market: from a product perspective, this policy merely allows "tokenized fund trading"; but from a market structure perspective, its true significance lies in Hong Kong's attempt to build a new type of securities market based on tokenization, centered on on-chain transactions, and supported by stablecoin settlement. In this system, asset issuance, trading, clearing, and fund transfers will gradually be completed on the same infrastructure, and the boundaries between traditional finance and digital finance will be redefined. This is not a simple deregulation, but a re-answer to "how the securities market should operate." *This article is for reference only and does not constitute any investment advice. The market is risky; invest with caution.