HKSFPA Proposes Self-Regulatory Committee for Hong Kong's Crypto Firms
Summary:
The Hong Kong Securities & Futures Professionals Association (HKSFPA) has suggested that cryptocurrency firms in the city establish a self-regulatory committee. The Association urged that licensing power should be delegated to the securities sector, which will form a self-regulatory body involving the futures, asset management, and virtual asset industries. This approach aims to foster balanced development and prevent excessive supervision in the industry.
In a bid for standardization and compliance among cryptocurrency companies, the Hong Kong Securities & Futures Professionals Association (HKSFPA) has suggested the creation of a self-regulatory committee. The HKSFPA, in its proposal conveyed on April 22, underlined that the emphasis in Hong Kong's financial industry is currently too geared toward supervision without appropriate entities to facilitate comprehensive growth.
The Association emphasized the necessity for Hong Kong to remain competitive in the global market and preserve its role as an international center of finance. It proposed to the city's Securities & Futures Commission (SFC) for the establishment of self-sustaining regulatory bodies with legislative purview, transferring the authority of issuing licenses to industry members instead.
According to the proposal, while the SFC continues to oversee market activities, licensing authority should be split, delegated solely to the securities sector. This regulatory body will be encompassing the futures and virtual asset industries along with the asset management sector.
HKSFPA's earlier proposal in August also advocated for "balanced supervision and development", designed to steer the city's virtual asset industry away from an excessively supervised atmosphere.
Self-regulation, however, doesn't always guarantee stability, as showcased by Lithuania whose tightening grip on crypto regulations due to compliance failures and embezzlement accusations. The Baltic nation has licensed over 580 cryptocurrency companies, yet, thus far, has exercised minimal oversight.
Comparatively, Hong Kong regulators have shown greater leniency towards virtual asset firms than regulators worldwide. The SFC recently approved Bitcoin and Ether exchange-traded funds (ETFs) issuers including China Asset Management, Harvest Fund Management, and Bosera Asset Management on April 15. Last year, virtual asset licenses were granted to cryptocurrency exchanges Hashkey and OSL by the regulator.
Meanwhile, the U.S. Securities and Exchange Commission (SEC) still has not granted approval for a spot Ether ETF or given any specific licenses for crypto exchanges. The likelihood of such approvals in the US seems bleak at this stage.
Published At
4/22/2024 6:35:00 PM
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