As per an analysis report revealed, the HKEX’s Chief China Economist’s office and Innovation research laboratory looked primarily at the potential of Blockchain and Artificial IntelligenceI among areas of finance, providing an outline of blockchain and doable use cases in commercialism, settlement and equities markets, for instance.
Emerging technologies like blockchain, it says, might be “integrated within the areas of investment, trading, clearing and settlement,” adding that laws, too, ought to be common to any or all firms within the finance ecosystem.
While totally different jurisdictions might apply different rules to the technology in some use cases, the authors counsels applying what they call the “consistency principle” in financial regulation – that’s the similar “financial businesses identical to the existing regulations.”
While adding further, the authors aforementioned:
“The principle of consistency needs that … the issuance of digital currencies and digital funds should be ruled underneath the present securities regulative framework.”
“The public fund-raising activities of shares issuance by issuers — that do so with simply a prospectus revealed on the web but with none underwriter nor compliance with the IPO registration procedures or strict disclosure act requirements — must be corrected by subjecting them to the governance by the Security laws.”
Further, linking similar financial services underneath existing rules would “maintain truthful competition, guarantee regulative effectiveness and stop regulative arbitrage,” the report argued.
One potential issue raised is that the fast-changing nature of fintech will doubtless open up regulative “loopholes.” As a result, it said, laws ought to be “continuously updated” to stay pace with technological amendment.
The report came on identical day that that world-wide money-laundering watchdog, the Financial Action Task Force, aforementioned it’ll draw up rules for international cryptocurrency regulation by next year in June.
The move would see any country that desires to remain enclosed within the international finance system having to license and regulate exchanges, digital wallet providers and companies hook up with initial coin offerings.
Even earlier in March this year, HKEX was reportedly in talks with its antipodal counterpart, the Australian Securities Exchange [ASX], to find out from its experiences in shifting over to a blockchain settlement system.