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

As a seasoned researcher with a penchant for all things financial, I find this recent development in Hong Kong’s regulatory landscape quite intriguing. Having closely followed the evolution of cryptocurrencies and their derivatives, it’s refreshing to see Hong Kong aligning its OTC reporting requirements with European standards. The use of Digital Token Identifiers (DTIs) seems like a logical step towards clarity and standardization in an industry that has long been shrouded in ambiguity.


As a financial analyst, I am sharing that our Hong Kong regulatory body has established standards for over-the-counter (OTC) crypto derivative transactions, aligning with the European Securities and Markets Authority’s guidelines. This includes the mandatory use of Digital Token Identifiers in these transactions, ensuring transparency and consistency within our crypto market.

On September 26th, the Hong Kong Monetary Authority and the Securities and Futures Commission proposed a plan to harmonize their Over-The-Counter (OTC) reporting regulations with those of the European Securities and Markets Authority (ESMA), following the analysis of feedback from a consultation paper issued in March 2024.

Starting from September 29, 2025, it’s been proposed by the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) that all parties should start using Digital Token Identifiers when reporting on Centralized Derivatives Trading (CTO) transactions.

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.”

Participants and financiers in Hong Kong shared their difficulties in trading Over-the-Counter (OTC) derivatives within the conventional categories of financial assets, namely interest rate products, currency exchange, credit risk, raw materials, and stocks.

Consequently, I find myself adjusting my strategies as a crypto investor, given that Hong Kong authorities are implementing reporting regulations to support the adoption of Digital Asset Trading Intermediaries (DTI).

According to the recent announcement by the HKMA and SFC, the European Securities and Markets Authority (ESMA) plans to initiate and fully implement Daily Transactional Settlement Ratio (DTSR) in reporting as of October 2023. Notably, DTSR is already a crucial benchmark for cryptocurrency service providers operating throughout Europe.

Entities involved in reporting can choose to continue using their existing Unique Swap Identifier (USI) and Unique Trade ID (TID) identifiers according to the present guidelines, or they have the option of reporting the new UTI identifier on a voluntary basis, until the implementation date arrives.

The announcement further indicates potential partnerships among financial authorities from nations such as Singapore, Australia, and Japan, focusing on a unified strategy for Universal Transactional Infrastructure (UTI) in the Asia-Pacific (APAC) region. This aim is to facilitate seamless adoption of UTI in Hong Kong.

On September 12th, according to South China Morning Post, discussions are underway regarding a potential collaboration between Hong Kong Customs and Excise Department and the local Securities and Futures Commission. This collaboration aims to develop a new regulatory framework for over-the-counter (OTC) crypto services.

Prior to collaborative actions, the C&ED had sole responsibility for overseeing Over-The-Counter (OTC) services. Meanwhile, the SFC has been engaging with various industry stakeholders regarding a prospective new regulatory framework and assessing regulations concerning cryptocurrency custody services.

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2024-09-27 14:32