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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