Hong Kong will align its rules for over-the-counter derivatives with European standards

According to Cointelegraph, on September 26th, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) shared a plan to raise their over-the-counter (OTC) trading reporting requirements to global standards after studying a consultation document in March 2024. They intend to adopt the reporting requirements set by the European Securities and Markets Authority (ESMA) for over-the-counter (OTC) derivatives. Hong Kong insiders and investors have stated that cryptocurrency over-the-counter derivative investments cannot be classified into the existing traditional five asset classes - interest rates, foreign exchange, credit, commodities, and stocks. Some Hong Kong stakeholders suggest using digital token identifiers (DTIs) to clearly identify encrypted asset targets in over-the-counter derivatives. In response, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) have pointed out that the European Securities and Markets Authority (ESMA) has included DTI in its reporting system in October 2023. At present, DTI has become a core reference point for European cryptocurrency service providers. When Hong Kong regulators mentioned the need for a unique product identifier (UPI) in transaction reports, they revealed plans to implement similar requirements in their jurisdiction in the near future: "Given that digital token identifiers are already included as permissible values in the data field 'Base ID (Other)' in the upcoming CDE Technical Guidelines 4th edition consultation, we will adapt to the use of DTI in reporting requirements." However, authorities will continue to monitor the results of orders issued in other jurisdictions and adopt similar systems if necessary. The Hong Kong authorities suggest implementing new reporting requirements before September 29, 2025.