Stan Group, a family-owned property firm that represents the assets of “shop king” real estate scion Tang Shing-bor will be meeting with Hong Kong’s securities watchdog in January 2020. The meeting is to seek approval for the sale of tokenized real estate assets as reported by the Hong Kong English-language newspaper South China Morning Post (SCMP) on June 12.
The group reportedly has a real estate portfolio estimated at over HK$50 billion ($6.38 billion). Amidst the escalating trade tensions between the United States and China, the local property market is seeing some major drop. The firm seeks a locally unprecedented approval from Hong Kong’s Securities and Futures Commission for regulated trading of blockchain tokens that would have real estate as their underlying asset.
The firm reportedly signed a memorandum of understanding with local security token insurance platform Liquefy, earlier this month in order to explore the possibilities of real estate tokenization. The tokenization will investors to own and trade blockchain tokens that confer ownership of a property — in whole or in part.
As per an official statement from Stan Group chairman Stan Tang Yiu-sing they “envision far better access and greater liquidity in the real estate market due to the fractional ownership that will be attained with tokenisation and our real estate exchange under development.”
Adrian Lai, the CEO of Liquefy states that owners would set the initial launch price of the future tokens. He further outlined that investors could trade tokens either from asset owners or from Liquefy’s partner securities brokerage firm.
The founder of the SFC-licensed advisory and asset management firm Bridgeway Prime Shop Fund Management, Edwin Lee told the publishing that Hong Kong has a complex regulatory framework for securities token trading, demanding investors to undergo a strict anti-money laundering process with extensive disclosures and paperwork.
Further, only professional investors with liquid assets worth in excess of $1 million are able to participate in such trades: according to Lee, there are ostensibly only around 100,000 such people in Hong Kong that would qualify.