Hong Kong Regulator Says Ignorance Can Lead To Excessive Regulation
The Executive Director of
the Hong Kong Securities and Futures Commission admitted recently that ignorance
and fear of the unknown can sometimes lead regulators to be overzealous in the
regulation of online trading activities, but said that he believes that the
SFC can avoid falling into that trap. Speaking at an online trading
seminar on Wednesday, Andrew Procter said that the disappearance of traditional
signifiers such as geography and intermediation, as a result of the rise of
the internet as a business medium had called into question the identity of the
regulators. Long exposure to physical
procedures such as paper based offerings and face to face transactions, combined
with a traditionally single jurisdiction focus had left the regulatory authorities
of many countries cut adrift in a time of online transactions and cross border
activities, leading to 'a tremendous temptation to over-regulate,' he observed.
However, he promised that
the Hong Kong SFC would strike a balance between regulation and facilitation
of the online trading industry, and said that over-regulation could be avoided
by leaving overseas online organisations with no choice but to exclude access
to Hong Kong, so that cross border regulatory issues need not occur. .
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