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

ChainCatcher news, according to Cointelegraph, on September 26, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) shared a plan to elevate their over-the-counter reporting requirements to global standards after reviewing responses to a consultation document from March 2024. They intend to adopt the reporting requirements set by the European Securities and Markets Authority (ESMA) for crypto over-the-counter (OTC) derivatives.

Relevant parties and investors in Hong Kong stated that investments in crypto OTC derivatives cannot be classified as part of the existing traditional five asset classes—interest rates, foreign exchange, credit, commodities, and equities. Some stakeholders in Hong Kong suggested using Digital Token Identifiers (DTI) "to clearly identify the crypto asset underlying OTC derivatives." In response, the HKMA and SFC pointed out that ESMA has incorporated DTI into its reporting framework as of October 2023. Currently, DTI has become a core reference point for European crypto asset service providers.

When mentioning the need for Unique Product Identifiers (UPI) in trade reporting, Hong Kong regulators revealed plans to implement similar requirements in their jurisdiction in the near future: "Given that Digital Token Identifiers have been included as permissible values in the data field 'Base ID (Other)' in the upcoming CDE Technical Guidelines Version 4 consultation, we will adapt the use of DTI in our reporting requirements." However, the authorities will continue to monitor the outcomes of orders issued by other jurisdictions and will adopt similar systems if necessary. Hong Kong authorities suggest implementing the new reporting requirements by September 29, 2025.