On 08 Jan 2025, the HKMA launched the Supervisory Incubator for DLT, establishing a one-stop platform for Authorized Institutions to obtain supervisory feedback and conduct live trials with case-by-case regulatory flexibility. The initiative aims to manage DLT adoption risks while addressing potential regulatory incompatibilities, with future plans to enhance industry-wide risk management through guidance and collaborative initiatives.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
SPOTLIGHT ON
FAMILY OFFICES
Launch of Supervisory Incubator for DLT
On 08 Jan 2025, the Hong Kong Monetary Authority (HKMA) announced the launch of the Supervisory Incubator for Distributed Ledger Technology (DLT), a new one-stop supervisory platform designed to assist Authorized Institutions (AIs) in maximizing DLT adoption benefits while effectively managing associated risks. The Incubator provides AIs with dedicated supervisory feedback on DLT proposals and the option to conduct live trials to validate risk management implementation through a hands-on, iterative approach.
Regulatory Flexibility and Future Initiatives
The HKMA will grant supervisory flexibility to AIs accessing the Incubator, including potential adjustments to compliance requirements, on a case-by-case basis contingent upon AIs managing risks commensurate with trial scale, scope, and nature. This flexibility aligns with the HKMA’s assessment against Fintech Supervisory Sandbox (FSS) operating principles. The Incubator will also address potential regulatory incompatibilities arising from DLT adoption, considering international standards and the principle of 'same activity, same risk, same regulation.' Long-term, the HKMA will leverage successful pilot cases to broaden industry awareness and enhance DLT risk management capacity through supervisory guidance, industry sessions, and research initiatives.
View the full article:Source
