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Hong Kong financial regulators set requirements for crypto over-the-counter derivatives following the European Securities and Markets Authority standards, including the use of Digital Token Identifiers.
On Sept. 26, the <a rel="noopener noreferrer nofollow" href="https://crypto.news/tag/hong-kong/">Hong Kong</a> Monetary Authority and the Securities and Futures Commission released a plan that would align their <a rel="noopener noreferrer nofollow" href="https://crypto.news/tag/otc/">OTC</a> reporting requirements with those of ESMA after studying responses to a consultation paper from March 2024.&nbsp;
The HKMA and <a rel="noopener noreferrer nofollow" href="https://crypto.news/tag/sfc/">SFC</a> propose that the mandatory use of Digital Token Identifiers for CTO derivatives reporting will start to take effect on Sept. 29, 2025.
The decision was made after regulators received feedback on the proposal from some Hong Kong stakeholders who recommended using DTIs “to unambiguously identify crypto-asset underliers for OTC derivatives.”
You might also like: <a rel="noopener noreferrer nofollow" href="https://crypto.news/eus-esma-edges-closer-to-crypto-regulations-with-latest-mica-report-seeks-public-feedback/"> EU’s ESMA edges closer to crypto regulations with latest MiCA report; seeks public feedback </a>
Hong Kong stakeholders and investors commented on the fact that they had a hard time placing OTC derivatives in any of the five traditional asset classes, which are interest rates, foreign exchange, credit, commodities and equities.
Therefore, Hong Kong regulators have decided to enforce reporting requirements to accommodate the use of DTI.
In the release, the HKMA and SFC cited that ESMA proposed and began implementing DTI in reporting as early as October 2023. Moreover, DTI currently serves as the core reference point for crypto asset service providers across Europe.
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 “To support reporting entities in transitioning to UTI, they may continue to report the existing trade identifiers of Unique Swap Identifier (USI) and Unique Trade ID (TID) as per the current reporting requirements, or report the UTI voluntarily, until the implementation date.”
</blockquote>
The release also hints at cross-border collaboration with financial regulators from countries like Singapore, Australia and Japan “on a coordinated implementation plan for UTI in the Asia-Pacific (APAC) region to ensure a smooth UTI adoption&nbsp;in&nbsp;Hong&nbsp;Kong”,
On Sept. 12, South China Morning Post <a href="https://www.scmp.com/tech/blockchain/article/3278116/new-hong-kong-crypto-scheme-could-see-changes-sfc-involvement-otc-rules" target="_blank" rel="noopener noreferrer nofollow">reported</a> that Hong Kong Customs and Excise Department were considering teaming up with the local Securities and Futures Commission in&nbsp;exploring a new licensing regulation for&nbsp;OTC&nbsp;crypto services.
Before the joint efforts, the C&amp;ED were the only ones regulating OTC services. While the SFC has been consulting industry players about the potential new regime and evaluating regulations for cryptocurrency custodian services.
Read more: <a rel="noopener noreferrer nofollow" href="https://crypto.news/hong-kong-eyes-sfc-involvement-in-crypto-otc-licensing-report/"> Hong Kong eyes SFC involvement in crypto OTC licensing: report </a>

Hong Kong crafts crypto OTC derivative rules in accordance with European standards

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