Hong Kong Officials Recommends Self-Regulatory Committee for Compliance Monitoring in Crypto Industry
The Hong Kong Securities & Futures Professionals Association (HKSFPA) advocated establishing a self-regulatory committee within the city’s crypto firms to enhance compliance monitoring on April 22.
“Many economically developed regions in the world have established statutory semi-official industry self-regulatory institutions to focus on industry development,” Hong Kong regulators wrote.
In a recommendation letter, the HKSFPA highlighted the absence of an overarching organization to foster the development of Hong Kong’s financial market industry. It criticized the current regulatory landscape as overly focused on supervision without adequate mechanisms for industry-wide coordination.
Highlighting the importance of Hong Kong maintaining its competitiveness in the global securities market and solidifying its position as an international financial center, the HKSFPA suggested the Securities & Futures Commission (SFC) delegate licensing powers to industry players.
Specifically, it proposed that the SFC retain supervision over market conduct while granting licensing authority solely to the securities industry. Additionally, the recommendation emphasized the establishment of a self-regulatory institution comprising representatives from the futures, asset management, and virtual asset industries.
This proposal aligns with the HKSFPA’s previous recommendation last August, which stressed balancing supervision and development to prevent the Hong Kong virtual assets industry from being excessively regulated.
The efficacy of self-regulation in maintaining a balanced risk-reward dynamic is a subject of debate, however, as evidenced by recent developments in Lithuania. The Baltic nation, grappling with compliance failures and
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