OKX HK - Trading Rules
Trading Rules - OKX HK
Last updated: 15 May 2024; Effective date: 1 June 2024
1. Introduction
OKX Hong Kong FinTech Company Limited ("OKX HK" or the "Company") provides centralized virtual asset trading platform services as well as off-platform virtual asset brokerage services subject to the laws and regulations of Hong Kong (collectively, (collectively, "Trading Services"). As a regulated virtual asset trading platform in Hong Kong, OKX HK is required to comply with the requirements set out under the Guidelines for Virtual Asset Trading Platform Operators ("VATP Guidelines"), the AMLO and the SFO and other applicable guidelines and circulars issued by the Securities and Futures Commission.
By accessing or using the Trading services provided by OKX HK, whether through visiting or accessing www.okx.com, associated application program interface or mobile applications (collectively, the “Trading Platform” or “OKX HK Platform”)), you (“User”, “user”, “You” or “you”, “client”, “customer”, or “trader”) have acknowledged that you have read, fully understood and agreed that your use of the Trading Services are governed by these Trading Rules (in addition to our Terms of Service, Risk Statement, Privacy Notice and Risk & Compliance Disclosure), so please ensure you read them carefully.
These Trading Rules may be amended, replaced, supplemented or otherwise changed at our discretion. Any such amendments will be effective immediately upon posting the revisions to the Trading Platform, so you are reminded to check the latest version from time to time.
Any translation of these Trading Rules or other related documents is provided for convenience only and may not accurately represent the information contained in the original English. In the event of inconsistency, the English language version of these Terms or other documents shall prevail.
2. Scope of Services
OKX HK operates an online centralized trading platform for its registered clients (including both Professional Investors and retail investors) to trade virtual assets ("VA" or "Virtual Assets")).
OKX HK is the platform operator which maintains:
an order matching platform that automatically, and according to pre-established criteria, matches users’ trades with open orders from other users, whereby users will not be able to predetermine or undertake a trade with a predetermined user ("Orderbook Transactions"); and
over-the-counter (OTC) trading services for users to submit requests for price quotation for the purchase or sale of a type of VA in exchange for another type of VA or fiat currencies (to the extent supported by OKX HK) ("OTC Transactions").
2.1 Access to the Trading Platform
Users can access the OKX HK Platform through the following channels:
its official website at hk.okx.com;
application software ("OKX app"):
Application Program Interface (API).
2.2 Types of Users & accounts
The Trading Services are intended solely for users who are aged 18 or older and users who are not on any trade or economic sanctions lists of any Competent Authority, which includes without limitation: Terrorism and terrorist financing, the financing of proliferation of weapons of mass destruction (WMDs) and other sanction lists such as the United Nations Security Council Sanctions List, European Union, Hong Kong Monetary Authority, Hong Kong Customs and Excise Department, Office of Foreign Asset Control as well as other administrative law enforcement agencies.
OKX HK provides Trading Services to retail investors, individual professional investors, corporate professional investors and institutional professional investors. Not all trading pairs provided on the Trading Platform are available for retail investors. Only virtual assets that meet the additional listing requirements for retail investors as provided in the relevant paragraphs of the VATP Guidelines and approved by the SFC are made available for retail investors. For details, please refer to the section titled Token Admission Policies and Requirements below.
OKX HK only accepts individual users who are Hong Kong residents. For users who are legal persons, OKX HK accepts users which are incorporated in Hong Kong or other certain jurisdictions (excluding the United States, People’s Republic of China, and other restricted jurisdictions). For further details, please refer to the Terms of Service.
2.3 User Account Security
OKX HK provides prompt notifications to its users via agreed means of communication (e.g. email notification and/or SMS notification) after certain client activities have taken place in their accounts. The triggers for these activity notifications include the completion of password change or reset, trade execution, and changes to any account-related information, etc.
2.4 Trading Sessions and Hours
The OKX HK Platform is accessible twenty-four (24) hours a day, seven (7) days a week, and three hundred and sixty-five (365) days a year, except for any period during which scheduled maintenance or upgrades are being carried out, or in the event that the OKX HK Platform encounters an interruption or outage that is unexpected or beyond the Company’s control.
2.5 Application Programming Interface (API)
OKX HK supports the use of its Trading Platform through API connections by both professional investors and retail investors for placing new orders, order amendments and order cancellations. In order to meet the needs of its users, OKX HK offers advanced API functionality and continues to upgrade it.
In order to maintain a fair and orderly trading platform, OKX HK may restrict the number of orders allowed through the API and monitor messages through the API in order to:
protect the API against denial of service attacks;
prevent the abuse of an order book; and
improve the overall trading experience on the Trading Platform.
Users of the API should be for legitimate trading purposes and any repeated violation of order rate limits will result in suspending or closing the user account in accordance with the Terms of Service.
3. Onboarding Requirements
3.1 Account Opening and KYC Requirements
All users registered with OKX HK must complete the account opening process and KYC requirements (collectively, "Onboarding Requirements") for know-your-client and AML/CFT purposes and for investor classification and risk profiling. A user will not be able to conduct any activities (including deposit, withdrawal, trading) with the account unless and until such user has completed all Onboarding Requirements.
A single client cannot open multiple accounts with the Company unless in the form of sub-accounts. A client cannot use another client’s account.
3.2 Exposure Limits
Except for institutional professional investors (“Institutional PI”) and qualified corporate professional investors (“QCPI”), OKX HK is required by law to set an exposure limit for each of its clients (i.e. including retail investors, individual professional investors, and non-qualified corporate professional investors), so to ensure that the client’s exposure to virtual assets is reasonable with regards to the client’s financial situation, risk appetite and investment objective.
As part of OKX HK’s onboarding requirements, each client (except for Institutional PI and QCPI) must complete a (i) risk profile questionnaire which reflects the client’s risk tolerance, risk appetite, experience with trading virtual assets, and investment horizons (“Risk Profile Questionnaire”), as well as a (ii) a knowledge test which examines the client’s knowledge in virtual assets (“Knowledge Test”).
Based on the outcome of the Risk Profile Questionnaire and Knowledge Test, OKX HK will calibrate and assign to each client an exposure limit (“Assigned Exposure Limit”), which represents the client’s maximum amount of VA holding on the Trading Platform. The Assigned Exposure Limit is calculated based on methodology adopted by OKX HK which takes into account factors such as:
the client’s financial situation (e.g., the client’s net worth and total VA holding across all trading platforms) as reported in the Risk Profile Questionnaire;
the client’s risk score from the Risk Profile Questionnaire, which reflects the client’s risk tolerance and risk appetite;
the client’s overall holdings in virtual assets held with OKX Hong Kong; and
the client’s background and other circumstances as reported in the Risk Profile Questionnaire.
A client will be prevented from: (i) making any depositing into its account with OKX HK and/or (ii) entering into a trading position with its OKX HK account, if doing so will cause the client’s total VA holding on OKX Hong Kong’s platform to exceed the client’s Assigned Exposure Limit.
4. Client Asset Custody, Deposit, and Withdrawal
Clients of OKX HK can deposit and withdraw virtual assets and/or fiat assets which are supported by OKX HK.
4.1 Virtual Assets
OKX HK FinTech ensures that all virtual assets belonging to its clients are properly safeguarded and held in wallet address(es) which are (i) established by OKX HK Custody and (ii) designated for the purpose of holding client virtual assets
OKX Hong Kong does not accept third party virtual asset transfers, i.e. users withdrawing from/depositing into their OKX HK accounts to/from: (i) a custodial wallet owned by a third party (save where the wallet is maintained by a third party VASP on the user’s behalf), or (ii) a self-custodial wallet (a.k.a. unhosted wallet or non-custodial wallet) owned by a third party.
OKX Hong Kong only accepts as user’s VA deposits from such user’s whitelisted wallet(s). OKX Hong Kong has put in place whitelisting controls to ensure that its clients wallet addresses belong to them and not to third parties: (a) for transfers to/from hosted wallets, OKX Hong Kong has implemented a travel rule technology solution; (b) for transfers to/from unhosted wallet, OKX Hong Kong has an internal whitelisting feature utilizing (i) Satoshi test and (ii) digital/cryptographic signatures.
In the event that a user claims an unintentional deposit of virtual assets to OKX’s hosted wallet, OKX HK will find out the users of the “from” address and “to” address. If both users agree that it is an unintentional deposit, If OKX HK considers it appropriate having taken into account the relevant factors, OKX HK may arrange to reverse/return the unintentional deposit after conducting further investigation, such as requiring proof of ownership before transferring the assets to the address as designated by the user who claims the unintentional deposit of such virtual assets.
In the event that a client deposits virtual assets that are not tradeable on OKX HK’s platform, the client will only be able to withdraw the non-tradeable virtual assets.
4.2 Fiat Assets
OKX HK may support client deposits of fiat currencies.
All fiat deposits are held on trust for the clients and kept in segregated bank account(s) established by OKX HK Custody (“Custody Bank Account(s)”) with authorized institutions in Hong Kong or banks in another jurisdiction as agreed by the SFC from time to time.
OKX Hong Kong does not accept third-party fiat transfers, i.e. users withdrawing from/depositing into their OKX HK accounts to/from a bank account opened in a third party’s name. All fiat deposit and withdrawals transfers from third party or to third party is automatically rejected via OKX Hong Kong’s in-house system
Any fiat deposit and fiat withdrawals are automatically checked against the name of the sender to ensure a same name bank account with the user. Funds will be returned to the originator/sender if the originating information does not belong to the user. Where a customer submits a withdrawal request and the system cannot match the customer name then the system will automatically reject the withdrawal request.
Where a user completes its account opening with OKX HK via non-face-to-face approach, As part of the onboarding process with OKX HK, such user is required to transfer an initial deposit of not less than HK$10,000 from a bank account in the client’s name maintained with a licensed bank in Hong Kong (“Designated Bank Account”) to the Custody Bank Account (or the Company’s bank account, after which the sum will be swept into the Custody Bank Account). Each client could have more than one Designated Bank Account if the verification by way of bank transfer has been completed in each of them in accordance with this paragraph. Clients can only withdraw fiat assets from their OKX HK accounts to the client’s Designated Bank Account(s). Where a customer submits a withdrawal request and the system cannot match the customer name then the system will automatically reject the withdrawal request.
OKX HK utilizes real-time transaction monitoring tools to conduct ongoing monitoring of fiat deposits into and withdrawals from OKX HK, which allows OKX HK to detect patterns of risky activity and identifies behavioural risk. Where unusual or suspicious activities are identified, OKX HK may suspend a client’s withdrawal or deposit activity.
OKX HK may also suspend a user account and freeze or lock the funds and assets in that account or suspend part of or all of the functions of a user’s account or access to the Trading Platform on grounds as set out in the section titled Account Suspension in OKX HK’s Terms of Service.
4.3 Deposit Limits
For deposits of virtual assets, there is a minimum threshold. This minimum threshold amount is equal to the estimated gas fee of sending a transaction on that blockchain. Client deposits below this minimum threshold will not have their balance credited.
Each client (save for institutional professional investors and qualified non-corporate professional investors) will be assigned an exposure limit in accordance with regulatory requirements in Hong Kong (see section titled Exposure Limit above). A client may be prevented from making further deposits if such clint's exposure limit has already been met, or if doing so will result in its total virtual asset holding on OKX HK exceeding the assigned exposure limit.
In addition to the above, OKX HK may have other deposit limits based on the its platform risk control measures.
4.4 Withdrawal Limits
For withdrawals of virtual assets, there is a minimum threshold for each transaction. The minimum threshold is equal to the greater of: (a) the minimum transaction amount required by some blockchains; or (b) the handling fee charged to the client, which is dependent on the gas cost of sending a withdrawal transaction on that blockchain. Clients are unable to request withdrawal if the amount is less than the minimum limit.
OKX HK administers an hourly limit and a daily limit (i.e. 24-hour limit) on the total VA withdrawal amount across all users, so to avoid withdrawal runs and to safeguard against abnormal user account activity (e.g. such as withdrawing a large amount of VA for suspicious or inappropriate operations). For each client, there is a daily 24-hour withdrawal maximum limit. Clients are unable to request withdrawal if their accumulated withdrawn amount is greater than this maximum limit. The 24-hour time frame refers to a sliding window of the previous 24 hours from any given moment. Normal withdrawal within the withdrawal limit will be executed by OKX HK on a real-time basis.
Besides single-client withdrawal limits, there are also hourly and daily velocity limits for the sum of all clients. The hourly limit refers to a sliding window of the previous 1 hour from any given moment. The daily limit refers to a sliding window of the previous 24 hours from any given moment.
In addition to the above, OKX HK may have other withdrawal limits based on the its platform risk control measures.
5. Automated trading system (ATS) Services
5.1 Order types
The OKX HK Platform supports the following order types:
Market order: A market order is an order to purchase or sell a virtual asset immediately at the best price currently available on the Trading Platform. A purchase market order will be matched to the lowest ask price on the order book, while a sell market order will be matched with the highest bid price on the order book.
Limit order: A limit order is an order that buys or sells a custom amount at a specific price or better. After the order is placed, the system will post it in the order book and match it with the available orders, at the specified price or a more favourable price to the user (whichever is lower, in case of a buy limit order, or whichever is higher, in case of a sell limit order). Limit orders are good till cancelled, meaning they will remain open until either filled or cancelled by the trader.
Advanced limit orders: OKX HK offers 3 variations to the standard limit orders, including: post-only limit order, fill-or-kill limit (FOK) order, and immediate-or-cancel (IOC) limit order:
Post-only limit order: This type of limit order will only be executed if the order is not immediately matched with existing orders in the market. In other words, a post-only limit order will be automatically cancelled when it is placed, if the Trading Platform detects that the limit order will be executed immediately upon the order placement because the prevailing market price is the same or better than the specified price. Post-only limit orders add liquidity to the market and allows the user to enjoy lower trading fees as a market maker compared to being a market taker.
Fill-or-kill (FOK) limit order: This type of limit order is based on a "time-in-force" parameter that a user can specify when opening a trade for dictating the conditions for its expiry. A FOK limit order requires the entire order to be executed immediately at the order price or better, otherwise it will be canceled. Partially filled orders will not be allowed.
Immediate-or-cancel (IOC) limit order: This type of limit order must be executed immediately at the order limit price or better, and any unfilled portion of the order will be cancelled.
Take-profit / stop-loss order:
A take-profit order allows the user to specify the exact price based on the user’s desired level of profitability, and when the market price reaches the specified take-profit level, the order is automatically triggered and placed in the orderbook for execution. If the price of the virtual asset never reaches the profit price, the take-profit order does not get placed or triggered. Such order is good till cancelled.
A stop-loss order allows users to specify the exact price (stop-loss price) at which a buy or sell order will be placed, allowing a user to either limit losses on a long position or lock in profits on a short position (in each case via a sell order) or to enter the market (via a buy order). Such order is good till cancelled.
Trailing stop order: A trailing stop order is a modified form of a stop order that enables users to set a trigger price (being either a pre-defined percentage or set dollar amount away from a virtual asset’s current market price), which will constantly change with regards to the market price based on the variance (percentage or constant). If the market price moves to the level of the trigger price, the trailing stop order will be triggered and placed in the orderbook for execution. User can also set an activation price which will determine when the trailing stop will be in effect to track the market price.
5.2 Order Book and Trade Execution
OKX HK offers a continuous trading session 24 hours a day, 7 days a week. As such, it does not have any pre-opening sessions or closing auction sessions.
All orders are continuously executed based on strict price-and-time priority rules as follows:
Price priority: precedence goes to the best ask or bid offers.
Time precedence: An order entered into the system at an earlier time must be executed in full before an order at the same price entered at a later time is executed, with reference to the timestamp of each order’s placement into the orderbook.
OKX HK adopts a pre-funded trading model, meaning no orders from a user will be accepted, unless there are sufficient funds (fiat or virtual assets) available in the user’s trading account. When a user places an order, the relevant amount of the concerned fiat or virtual assets (including applicable fees) is placed on hold in the user account until the order is filled, expires, or is cancelled.
An order may be partially filled or may be filled by multiple matching orders arising from different users. Any unfiled portion of an order will remain on hold until it fills, expires or is cancelled.
5.3 Order Book Trade Confirmation
Every time a user places an order, cancels an order, and amend an order, the user will be prompted to confirm the following information of the order before submitting the order in the Trading Platform.
Name of the trading pair
Bid price / Ask price
Quantity and amount of value
Fees and charges to be borne by the user
A warning that the transaction may not be undone once it is executed
When an order is executed (partially or completely filled), Trading Platform will send a confirmation to the user by email or SMS notification (or such other means of communication as may be supported by the Trading Platform or otherwise specified under the Terms of Service).
5.4 Order Book Settlement
All filled orders are settled immediately by debiting and crediting the relevant balances of assets (fiat or virtual assets in both seller’s account and buyer’s account). The seller and the buyer will receive immediate notification of their fill(s) and they can also be viewed in trading history in the user’s account.
5.5 Order Cancellation and Amendments
A user may cancel an order after it is submitted, as long as such order has not been executed pending confirmation by the Trading Platform. Virtual assets which are the subject of a pending trade shall not be reflected in the user’s account, and shall therefore not be available for the user to trade. Order is irreversible once the order is executed.
5.6 Fee Structure
The applicable fee schedule could be found on hk.okx.com which may be updated from time to time.
5.7 Opening Price Mechanism
OKX HK offers a continuous trading session 24 hours a day, 7 days a week. As such, it does not have any opening price mechanism save for the listing of a new trading pair on the Trading Platform.
For the listing of a new trading pair (subject to the Company’s Token Admission Critieria and other regulatory requirements), OKX HK may support a pre-opening Call Auction session for such trading pair.
5.8 Pre-Trade Controls
Pre-trade controls implemented by OKX HK may include the following a combination of the following:
Pre-trade confirmation, which takes the form of a popup requiring confirmation from the user prior to proceeding with placing the order, which is to prevent "fat-finger" input or instructions errors, including price, quantity, and/or timing (market vs. limit order specification) errors. Users are required to verify all transaction information prior to submitting an order.
Maximum order volume controls, which are parameters limiting the volume of transactions a user can make within a certain amount of time. This control will prevent users from placing orders of uncommonly large order volume (e.g. the quantity exceeds the average daily volume or average volume over a specified period). Such limits may be set based on a particular number of orders or set acceptable percentage levels to ensure orders do not exceed an average or determined proportion of trades for that day or type of virtual asset.
Maximum order value controls, which prevent orders with unreasonably large order values from being routed to the market. This control will prevent users from placing orders of uncommonly large order value (e.g. the quantity exceeds the average daily volume or average volume over a specified period).
Pre-trade price collars, which are price parameters reflecting reasonable price ranges by having regard to the depth of the order book and the prevailing market price, such that orders must fit within these parameters in order to be executed. This control is intended to eliminate the risk of a user buying too high or selling too low by accident. If a user attempts to place an order at prices that are beyond the price collars, such order will be automatically blocked such that the user has to reassess the proposed trade or remedy the error.
Execution throttling, which is a limit on the maximum number of repeat executions featuring the same characteristics within a specified time interval, intended to control the rate at which orders are sent to the market. It is designed to ensure that users (or the users' own trading algorithm) do not place an excessive number of orders or execute trades too rapidly, which can lead to unintended consequences such as market disruptions or excessive losses.
Message throttling, which is a limit on the maximum number of messages (including those for the submission, amendment or cancellation of orders) that can be sent to the orderbook within a specified time interval.
Conflict of interest management, which includes staff dealing policy and other governance controls put in place by OKX HK.
5.9 Post-Trade Controls
For purposes of post-trade controls, OKX HK has put in place a comprehensive market surveillance programme in order to maintain fair, transparent and efficient markets through prevention of illegal activities or trading practices that allow any user to gain unfair advantages, such as prevention of wash-trading, insider trading, spoofing, layering, and other market manipulation and fraudulent activities.
OKX HK has adopted an effective market surveillance system provided by a reputable and independent provider to identify, monitor, detect and prevent any market manipulative or abusive activities on the Trading Platform, and provide access to this system for the SFC to perform its own surveillance functions when required.
6. Over-the-Counter Trading Services
6.1 OTC Trading Session and Hours
The OTC trading service provided by OKX HK is accessible twenty-four (24) hours a day, seven (7) days a week, and three hundred and sixty-five (365) days a year, except for any period during which scheduled maintenance or upgrades are being carried out, or in the event that the Trading Platform encounters an interruption or outage that is unexpected or beyond the Company's control.
6.2 OTC Trading Channels
OKX HK's OTC trading services are accessible both via OKX App, website version, or API. Note, however, that the LMP function may not be supported via the App.
6.3 Types of OTC Trading Services
OKX HK provides the service in RFQ Mode. RFQ, request for quote, a widely used model for OTC trading during pricing and trading process. Client sends request containing specific information (virtual asset trading pair, quantity, buy/sell direction) to OKX HK. And OKX HK would return a quote to the client for each request. Client can confirm the deal any time within the Quote period.
OKX HK offers the following OTC trading services:
(A) “Express Buy”
Express Buy allows users to purchase any of the Listed VAs using fiat currencies supported by OKX HK and fiat payment methods supported by OKX HK.
Express Buy enables the user to conduct fiat-to-VA OTC transaction as follows:
User to select the type and quantity of Virtual Asset that user intends to purchase, which will be sent as an RFQ to OKX HK’s OTC system and the OTC system will in turn dispatch the RFQ to OKX HK’s liquidity provider(s), which may include OKX HK’s Related Parties (as defined in the Terms of Service).
Upon receiving quotes from liquidity provider(s), the OTC system will process the data and select only the best quote for display to the user.
If user confirms to proceed, user will be prompted to make fiat payment to OKX HK based on the quote; upon payment confirmation, the OTC system will arrange for OKX HK to have a back-to-back transaction with the User and the relevant liquidity provider; and
Upon completion of an "Express Buy" transaction, the purchased VA amount will be credited to the user's account with OKX HK, and the user will receive a trade confirmation.
(B) “Convert”
User can convert (1) any Listed VA to another Listed VA, or (2) fiat asset to a Listed VA (or vice versa).
Convert enables the user to conduct Fiat-to-VA OTC trades as follows:
User to select the type and quantity of Virtual Asset or fiat asset that user intends to convert (“Base Asset”) and the VA which the user intends to receive in exchange ("Quote Asset"), which will be sent as an RFQ to OKX HK’s OTC system and in turn dispatched to OKX HK’s liquidity provider(s), which may include OKX HK’s Related Parties (as defined in the Terms of Service).
Upon receiving quotes from liquidity provider(s), the OTC system will (through automated workflows) process the data and select only the best quote for display to the user.
If user confirms to proceed with the displayed quote, the OTC system will arrange for OKX HK to have a back-to-back transaction with the User and the relevant liquidity provider.
Upon completion of the "Convert" transaction, the corresponding amount of Quote Asset will be deposited directly in the user's OKX HK account, in exchange for the deduction of the specified amount of Base Asset from the user's account.
The Convert function is limited to the amount of Base Asset that is available in the user's account balance (i.e. fiat balance or VA balance), and user can deposit more Base Asset or purchase more Base Asset with fiat currencies before completing a Convert transaction.
(C) “Liquid Marketplace”
The OKX Liquid Marketplace (“LMP”) provides liquidity-as-a-service (LaaS), allowing traders to tap into on-demand liquidity network on the market, through an execution layer that automates trades and settlements off the order book. It supports end-to-end automated execution from order, to price discovery, settlement, and clearing.
In order to access the LMP function, a client must have a minimum account balance of USD10,000 (or its equivalent), while the minimum block size for each RFQ should have a notional value of at least USD10,000 or equivalent. Note that the said threshold values may be updated by OKX HK from time to time.
LMP enables a user to:
Create a customized RFQ;
Place the RFQ through the LMP interface, which will be shared with the network of liquidity providers (which may include OKX HK’s Related Parties (as defined in the Terms of Service)):
When placing the RFQ, user has the option to choose which liquidity provider(s) to send the RFQ to, or user may use the “select all” option to send the RFQ to all available counterparties.
User may also choose to submit the RFQ anonymously or otherwise.
User will be asked to double check the RFQ parameters before sending out the RFQ.
Choose among all the quotes received from liquidity provider(s), and proceed with trade execution after selecting the preferred quotes and confirming the relevant details; and
Benefit from direct settlement between the user’s account and the relevant liquidity provider’s account (if any of the account does not have sufficient balance to complete the transaction, the transaction will be aborted instead).
6.4 OTC Trade Confirmation
Prior to the execution of each off-platform transaction, OKX HK will confirm with its clients the following terms:
name of the virtual asset(s) and fiat asset (if applicable) in the proposed transaction;
amount or value of the proposed transaction;
fees and charges to be borne by the client including applicable exchange / conversion rates; and
a warning that once executed the transaction may not be undone.
Clients can confirm the trade anytime within the valid period ("time to live” (TTL)) for each quote provided in response to an RFQ.
After OKX HK has effected a transaction for a client, it will confirm promptly with the client the essential features of the transaction, including (i) name of the virtual asset in the transaction, (ii) amount or value of the transaction; and (iii) fees and charges borne by the client.
6.5 OTC Settlement Process
(A) For “Express Buy” and “Convert”
OKX HK will act as the counterparty of its users with respect to all Express Buy / Convert transactions, and enter into back-to-back transactions with its liquidity provider(s). Upon receiving a purchase order from a client, OKX HK will purchase the relevant VA from its liquidity provider and then sell the same VA to the client; or upon receiving a sell order from a client, OKX HK will purchase the relevant VA from the client and then sell the same VA to its liquidity provider.
OKX HK does not take market risk for such back-to-back arrangements and does not add any spread on top of the quotes it received from its liquidity provider(s).
OKX HK adopts a pre-funded trading model for its OTC trading services. If there is insufficient funds either the client’s or the liquidity provider’s account, the transaction will be aborted.
When a client confirms to proceed with a transaction through the OTC system, idempotent settlement will immediately occur between the client's account and OKX HK's a system account dedicated for OTC transaction.
(B) For LMP function
Upon receiving user’s confirmation, the OTC system will arrange for direct settlement between the user’s account and the relevant liquidity provider’s account.
OKX HK adopts a pre-funded trading model for its LMP function, if there is insufficient funds either the client’s or the liquidity provider’s account, the transaction will be aborted.
Upon completion of the transaction, the client’s account balance and the liquidity provider’s account balance will be updated to reflect the transaction. The relevant RFQ will be marked as “filled”.
6.6 OTC Fee Structure
For “Express Buy” and “Convert” functions, the quoted price is the total amount to be paid by the client for executing the OTC transaction. The client does not need to pay an additional handling fee or trading fee to OKX HK for OTC transactions.
For LMP functions, the same fee structure sets out in the section titled Orderbook Trading Fee Structure above applies.
6.7 Suitability Assessment
In the event where OKX HK offers any recommendation or solicitation with respect to off-platform trading activities (e.g. OTC transactions), OKX HK will ensure suitability of the recommendation and solicitation for the client is reasonable in all the circumstances having regard to the information about the client. For transactions in complex products, OKX HK will ensure that the product is suitable for the client in all the circumstances, regardless of whether there is any recommendation or solicitation. For the avoidance of doubt, OKX HK is exempted from the said obligation when dealing with institutional professional investors and qualified corporate professional investors.
7. Contract Notes, Account Statements and Receipts
OKX HK provides to each client timely and meaningful information about the transactions conducted with the client or on the client’s behalf, the client’s holdings and movements of client virtual assets and fiat currencies, and other activities in the client’s account.
Contract notes, monthly statements of account and deposit receipts are made available to the user by accessing “Order Center” after logging into the OKX HK Account.
8. Token Admission Policies and Requirements
OKX HK is dedicated to ensuring a fair and transparent listing procedure, with the objectives of (a) preventing financial crime; (b) protecting the Company’s business and customers from fraud and market abuse; (c) enhancing the integrity of the markets where the Company operates by listing on its trading platform only Tokens permitted under applicable law and regulations.
8.1 Token Listing Committee
OKX HK has established a Token Admission and Review Committee (“Listing Committee”) responsible for establishing, implementing and enforcing the criteria and making the final decisions for (i) admitting a token for trading (“Listed VA”) by retail investors and/or professional investors on the Trading Platform; and (ii) halting, suspending and withdrawing a Listed VA from trading, as well the options available to clients holding such affected tokens. This includes but not limited to ongoing monitoring and due diligence over the Listed VAs, and creating and enforcing rules that specify the obligations and restrictions of issuers of the Listed VAs.
The core committee members of the Listing Committee include senior management of OKX HK who are principally responsible for managing: (i) key business line(s); (ii) compliance, (iii) risk management, (iv) and information technology functions. The Listing Committee may also include other personnel of OKX HK or its Related Party (as defined in the Terms of Service) as appropriate, pursuant to nomination by any of core committee members and subject to final approval by OKX HK’s board of directors. The membership of the Listing Committee will be reviewed annually by the board, and all members of the Listing Committee are eligible for reappointment.
The Listing Committee shall have meetings at least monthly and on an ad-hoc basis as needed to conduct evaluations and reviews of Listed VAs, proposed listing, airdrop, or hard fork events, or other critical matters. At the Listing Committee meetings (which may be conducted virtually or physically), the presence of a majority of the members of the Committee (which should include a majority of the core committee members) shall be necessary and sufficient to constitute a quorum. Decisions shall be determined by simple majority, and, in the event of a tie, the chairman of the Listing Committee shall have the casting vote.
8.2 General Token Admission Criteria
The VA issuer applying for listing on OKX HK’s Trading Platform shall provide all such relevant information as may be reasonably required by OKX HK in connection with OKX HK’s due diligence review on the VA.
OKX HK will, at a minimum, consider the following aspects of a VA as part of its VA due diligence review:
the background of the management or development team of a virtual asset or any of its known key members (if any);
the regulatory status of a virtual asset in Hong Kong and whether its regulatory status would also affect the regulatory obligations of OKX HK;
the supply, demand, maturity and liquidity of a virtual asset, including its track record, where the virtual asset (except for a security token) should be issued for at least 12 months;
the technical aspects of a virtual asset;
the development of a virtual asset;
the market and governance risks of a virtual asset;
the legal risks associated with the virtual asset and its issuer (where applicable);
whether the utility offered, the novel use cases facilitated, technical, structural or cryptoeconomic innovation, or the administrative control exhibited by the virtual asset clearly appears to be fraudulent or illegal, or whether the continued viability of the virtual asset depends on attracting continuous inflow into the virtual asset;
the enforceability of any rights extrinsic to the virtual asset (for example, rights to any underlying assets) and the potential impact of the virtual asset’s trading activity on the underlying markets;
the money laundering and terrorist financing risks associated with the virtual asset;
whether smart contract audit has been conducted by an independent assessor for smart-contract based virtual assets, and whether such audit demonstrates that the virtual asset is not subject to contract vulnerabilities or security flaws to a high level of confidence; and
whether the offering of the VA on the Trading Platform will result in any breach of the offer of investments requirements under Hong Kong laws (e.g. prospectus requirements for offering of shares and debentures under Parts II and XII the the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong) (CWUMPO), restrictions on offers of investments under Part IV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), in particular the restrictions on offering of unauthorised collective investment schemes (CIS) and structured products notwithstanding the offer is made by or on behalf of an intermediary licensed or registered for Type 1 (dealing in securities), Type 4 (advising on securities) or Type 6 (advising on corporate finance) regulated activity; and (c) relevant requirements relating to the offering of CIS on the internet as set out in the Guidance Note for Persons Advertising or Offering Collective Investment Schemes on the Internet issued by the SFC) (“Offering Restrictions”).
Note that OKX HK may have additional considerations or listing requirements as may be appropriate for risk management, investor protection, and/or regulatory compliance.
8.3 Retail Token Admission Criteria
Apart from the General Token Admission Criteria above, where a VA is to be made available to Retail Clients in Hong Kong (“Retail Token”), it must also satisfy all of the following additional criteria (“Retail Token Admission Criteria”):
Each Retail Token must be an eligible large-cap VA, meaning it must be included in a minimum of two acceptable indices issued by at least two different index providers (the “Acceptable Indices”).
Each of the Acceptable Indices must be (i) guided by a clearly defined objective to measure the performance of the largest Tokens in the global market; (ii) investible, meaning the constituent VAs should be sufficiently liquid; (iii) objectively calculated; (iv) rules-based; and (v) equipped with necessary expertise and technical resources to construct, maintain and review the methodology and rules of the index; and (vi) governed by well documented, consistent and transparent rules.
The two index providers should be separate and independent from each other, the issuer of the virtual asset (if applicable) and the Company (for example, they are not within the same group of companies). Further, at least one of the indices should be issued by an index provider which complies with the IOSCO Principles for Financial Benchmarks and has experience in publishing indices for the conventional securities market.
The VA does not fall within the definition of “securities” under Hong Kong law, unless the offering of such VA to the retail clients qualifies for applicable exemptions or otherwise complies with the requirements for offering of shares and debentures under the CWUMPO and does not breach the Offering Restrictions.
The Company should be reasonably satisfied from its due diligence review that the Retail Token is “highly liquid”. For the avoidance of doubt, inclusion of a Retail Token by an Acceptable Index is not itself sufficient for the Company to conclude that a Retail Token is highly liquid.
Any other considerations or listing requirements as may be imposed by OKX HK as may be appropriate for risk management, investor protection, and/or regulatory compliance.
8.4 Suspension of Trading or Delisting of Listed VA
OKX HK conducts ongoing monitoring of each of its Listed VAs and makes determination as to whether to continue to allow it for trading (for example, whether in respect of a particular segment of its clients or whether a virtual asset continues to satisfy all the token admission criteria). For this purpose, regular review reports are submitted for review by OKX HK’s Listing Committee.
Set out below are a non-exhaustive list of factors which OKX HK may consider when assessing whether to suspend or remove a Listed VA
where there are unusual price movements concerning a Listed VA or where the price difference or spread is unusually high;
where a Listed VA’s underlying blockchain or related technology becomes compromised or defective (e.g. faulty network or smart contract reliability);
where there is an absence of protocol development or non-existent business-to-customer interaction for the relevant Listed VA;
proof of fraudulent or illegal activities concerning the Listed VA, its issuer, and/or its underlying protocol;
whether the VA falls under the definition of “securities” under the SFO;
whether the VA is no longer supported or maintained by the issuer or its known members;
whether there are complaints by users or other persons of the VA, and the nature, magnitude and frequency of such complaints;
where there is reasonable belief that the issuer is manipulating the price of the virtual asset and the circumstances are serious, or where a false market for trading or may have developed;
where there is any change to the development team of the VA which the Company considers to have material adverse impact on the VA;
where there is a lack of liquidity in the virtual assets’ market over a prolonged period of time;
where the issuer conducts a hard fork of the VA resulting in the Company no longer able to support the token;
where the market capitalisation of the VA drops significantly below a specified threshold;
where the daily average transaction volume of the VA is less than a specified amount over a period of time;
where the issuer does not take immediate action or provide a solution in the event of a crisis considered by the Company that causes a detrimental impact to the Company and its users;
where the issuer conducts any activities that damage the reputation of the Company or adversely affecting users’ interests; or
any other factors that may be considered as relevant by the Listing Committee, including but not limited to those in relation to investor protection or safeguarding of the Trading Platform’s reputation and business viability.
If a decision to suspend or de-list a Listed VA has been made by the Listing Committee, the Company will, as soon as reasonably practicable, notify clients of the decision and its rationale, inform clients of their options and ensure they are treated fairly. Specifically, the OKX HK will endeavour to, among others: (i) publicly announce the suspension or de-listing decision and continue to provide updates on the situation as they become available via the Trading Platform and other appropriate communication channels, (ii) immediately disable funding and trading in the affected VAs; (iii) provide reasonable assistance to any clients to exercise their rights in respect of the affected VAs if suspension or delisting the Token is likely to prejudice those rights.
The Company will notify the SFC in writing as soon as practicable after deciding to suspend or remove a VA from trading by the Company.
9. Platform Security and Maintenance
9.1 Platform Security
OKX HK has put in place and maintains robust IT infrastructure, systems and security controls to support its business activities and operations in accordance with industry practices, so to achieve a high level of information security, cybersecurity, system resilience and business continuity.
OKX HK has also adopted policies and procedures to effectively manage and adequately supervise the design, development, deployment and operations of the Trading Platform (inclusive of the ATS and custody infrastructure), regularly reviews the same in line with changing market and regulatory developments.
OKX HK engages qualified independent third-party assessors to conduct annual technology audits.
9.2 Service Interruption
The Trading Platform may not be able to operate properly because of the following circumstances and the users may be unable to access all or part of the services (including placing or cancelling an order, depositing or withdrawing assets). These circumstances include, but are not limited to:
system downtime during maintenance or upgrade as announced by the Trading Platform;
telecom or networking equipment issues;
force majeure factors;
any other issues including hacker attacks, computer virus intrusion or attack, Website or backend maintenance and upgrade;
the Trading Platform or the users’ assets are the subject of an attempted or actual malicious attack which may, among other things, result in the theft or loss of such assets;
an event affects the proper functioning of critical systems relied upon by the Trading Platform including the pricing system or any other system necessary for the provision of the services;
suspected unauthorized use of the Trading Platform or a breach of applicable laws and regulations;
the Trading Platform decides to cease handling a virtual asset based on the results of a hard fork that causes a chain split or changes to the virtual asset;
for any other reason, the Company determines in its sole discretion that the suspension is necessary from investor protection, market integrity and regulatory compliance perspective.
The Company will announce events of system maintenance and outage on its website where the public can view the system maintenance information, issue descriptions, and the status of deposits and withdrawals. API clients can also receive announcements from the Status API.
9.3 Scheduled System Maintenance or Upgrade
In addition to a notice published on the website as mentioned above, scheduled downtime will be communicated in advance to all clients through agreed means of communication (e.g. OKX App, API, and/or client's registered email address etc.) in advance of the scheduled maintenance.
OKX HK may continue to provide subsequent communications to the clients in relation to the schedule system maintenance or upgrade, such as:
Onset of the maintenance or upgrade;
Any extension of time required for the downtime; and
Resumption of services.
9.4 Unexpected and Unplanned System Outage
The Trading Platform may suspend from trading due to force majeure, viruses, hacker attacks, system instability, flaws in third-party services, acts of government, or government agency etc. The Company will announce as soon as practicable the service or trading interruption.
The Company will keep the clients informed of the progress and status throughout the disruption period through agreed means of communication (e.g. OKX App, API, and/or client's registered email address etc.). Where feasible, the Company will inform the clients of the expected timeline for service or trading to resume normal.
After the service resumes normal, the Company will publish an announcement to describe the incident of this anticipated system failure, including the process of the failure, the cause of the failure, and how to prevent this happening again.
9.5 Handling of Pending Orders in the Order Book
During the downtime maintenance period, users can only conduct limited activities if the "Downtime Recovery Protection Phase" is enabled (see details below). Otherwise, during the downtime maintenance period, access to the order book is suspended and all trading and funds transfer activities are not available.
During the Downtime Recovery Protection Phase, OKX HK supports clients to cancel orders, place post-only orders, or transfer funds into their trading accounts; other than that, users cannot place orders or make any other modification of orders.
OKX HK will decide whether to enable the Downtime Recovery Protection Phase based on the duration of the system maintenance and market volatility at the material time. Users will be notified through the OKX App, Webpage, and API about the initiation and expiry of the Downtime Recovery Protection Phase, and any extension or changes thereto.
10. Risk Management
OKX HK imposes qualitative risk appetites to uphold key principles of providing high-quality and safe trading services to its clients and to guide the conduct of its business operations. OKX HK has put in place risk management policies, controls and procedures to identify, manage, and report risks adequately.