The Hong Kong Securities & Futures Professionals Affiliation (HKSFPA) warned that the town’s proposed rollout of recent crypto licensing regimes could unintentionally pressure compliant crypto managers to stop actions if regulators proceed with out transitional preparations.
The warning facilities on what the group described as a possible “arduous begin,” underneath which current companies can be required to be totally licensed by the graduation date of the brand new guidelines or stop regulated actions whereas their purposes are underneath assessment.
Hong Kong’s Securities and Futures Fee and the Monetary Providers and the Treasury Bureau are at present consulting on new licensing regimes that cowl digital asset dealing, advisory and administration companies, which might develop regulatory oversight past the town’s current framework for crypto buying and selling platforms.
Whereas supporting the general path of tighter supervision, the group warned that implementing the brand new guidelines with out transitional preparations might create operational bottlenecks, disrupt fund administration actions and undermine enterprise continuity for firms already working out there.
Trade group recommends a six to 12-month deeming interval
In a session submission to the regulators, the business group urged the introducion of a deeming or grace interval for current practitioners who submit license purposes forward of the regulatory graduation date.
The group said that the absence of transitional preparations poses a danger that reputable managers could also be compelled to halt their operations whereas awaiting approval, notably given the complexity of the appliance course of and the potential for backlogs.
“Reputable companies could also be pressured to droop operations whereas awaiting approval,” the HKSFPA wrote. “We strongly urge the federal government to implement a 6 to 12-month deeming interval for current practitioners who submit their purposes previous to the graduation date.”
The brand new digital asset regimes are nonetheless on the session stage and would not have a set graduation date but.
Associated: China-led CBDC venture mBridge tops $55B in cross-border funds
Trade physique warns that inflexible timelines might hinder adoption
Past the hard-start concern, the session additionally touched upon wider modifications to the crypto regulatory perimeter, together with new necessities for advisory and administration companies.
In its submission, the affiliation stated that it helps Hong Kong’s efforts to combine digital belongings into the monetary system.
Nonetheless, it warned that the absence of transitional preparations and inflexible implementation timelines might deter compliant companies from taking part and hinder institutional adoption.
On Monday, the identical business group backed the path of Hong Kong’s deliberate implementation of the OECD’s Crypto Asset Reporting Framework (CARF) whereas warning that poorly calibrated necessities might expose firms to legal responsibility and operational dangers.
Collectively, the submissions spotlight a recurring theme of their business suggestions, which is the help for stronger oversight in precept, coupled with requires flexibility in execution to keep away from disruption.
Journal: Chinese language customers flip to ’U playing cards’ to get round crypto guidelines: Asia Categorical
