Lawrence Damilola
Hong Kong’s financial regulators, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC), have announced plans to align their over-the-counter (OTC) derivatives reporting framework — including crypto derivatives — with global standards. This move follows a consultation paper presented in March 2024, with a final implementation deadline set for September 29, 2025.
Last week, The Shib Daily reported that the SFC sought opinions from industry participants on a proposed licensing regime for cryptocurrency OTC services.
However, the proposed changes will align Hong Kong’s reporting requirements with those adopted by the European Securities and Markets Authority (ESMA). The HKMA and SFC intend to implement several key international reporting standards, including the use of Unique Transaction Identifiers (UTI), Unique Product Identifiers (UPI), and Critical Data Elements (CDE) in OTC derivatives reporting.
“We will accommodate the use of the Digital Token Identifier (DTI) in our reporting requirements, following the inclusion of DTI in the data field ‘Underlier ID (OTHER)’ as an allowable value in the upcoming consultation of version 4 of the CDE Technical Guidance,” the HKMA and SFC said in a joint statement. The regulators also emphasized monitoring global mandates to ensure Hong Kong remains in sync with other major jurisdictions.
Digital Token Identifiers for Crypto Derivatives
Hong Kong will introduce the Digital Token Identifier (DTI) to identify crypto-asset underliers for OTC derivatives as part of the changes. This step follows recommendations from industry stakeholders, who pointed out that traditional asset classes — such as interest rates, foreign exchange, and equities — do not encompass crypto assets. The DTI, already implemented by ESMA in October 2023, is seen as a tool to improve clarity and consistency in reporting.
📢 HKMA expands “Project e-HKD” to “Project e-HKD+” and commences e-HKD Pilot Programme Phase 2. We’re exploring new forms of digital money with 11 groups of diverse firms, focusing on innovative e-HKD and tokenised deposit use cases. pic.twitter.com/9R3oLdqqBa
— HKMA 香港金融管理局 (@hkmagovhk) September 23, 2024
The HKMA and SFC confirmed that the DTI would be part of the new reporting regime: “Given the development of global reporting standards, we will follow the trend and adopt Digital Token Identifiers where applicable. ” This change will be part of the broader effort to streamline the number of mandated data fields in line with European, U.S., and other APAC jurisdictions.
In addition to the new identifiers, Hong Kong will adopt the ISO 20022 XML message standard for OTC derivatives reporting. Stakeholders have broadly supported this adoption during the consultation process and will ensure consistency with global practices. The regulators believe this will help enhance data sharing and analysis across different jurisdictions.
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Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
