Hong Kong crafts crypto OTC derivative rules in accordance with European standards
Hong Kong monetary regulators set necessities for crypto over-the-counter derivatives following the European Securities and Markets Authority requirements, together with the usage of Digital Token Identifiers.
On Sept. 26, the Hong Kong Financial Authority and the Securities and Futures Fee launched a plan that will align their OTC reporting necessities with these of ESMA after finding out responses to a session paper from March 2024.
The HKMA and SFC suggest that the obligatory use of Digital Token Identifiers for CTO derivatives reporting will begin to take impact on Sept. 29, 2025.
The choice was made after regulators obtained suggestions on the proposal from some Hong Kong stakeholders who really useful utilizing DTIs “to unambiguously determine crypto-asset underliers for OTC derivatives.”
Hong Kong stakeholders and traders commented on the truth that they’d a tough time putting OTC derivatives in any of the 5 conventional asset courses, that are rates of interest, overseas trade, credit score, commodities and equities.
Due to this fact, Hong Kong regulators have determined to implement reporting necessities to accommodate the usage of DTI.
Within the launch, the HKMA and SFC cited that ESMA proposed and started implementing DTI in reporting as early as October 2023. Furthermore, DTI at the moment serves because the core reference level for crypto asset service suppliers throughout Europe.
“To help reporting entities in transitioning to UTI, they could proceed to report the prevailing commerce identifiers of Distinctive Swap Identifier (USI) and Distinctive Commerce ID (TID) as per the present reporting necessities, or report the UTI voluntarily, till the implementation date.”
The discharge additionally hints at cross-border collaboration with monetary regulators from nations like Singapore, Australia and Japan “on a coordinated implementation plan for UTI within the Asia-Pacific
(APAC) area to make sure a clean UTI adoption in Hong Kong”,
On Sept. 12, South China Morning Publish reported that Hong Kong Customs and Excise Division had been contemplating teaming up with the native Securities and Futures Fee in exploring a brand new licensing regulation for OTC crypto companies.
Earlier than the joint efforts, the C&ED had been the one ones regulating OTC companies. Whereas the SFC has been consulting business gamers in regards to the potential new regime and evaluating rules for cryptocurrency custodian companies.
