The financial sector is continually evolving, driven by dynamic regulatory reforms that require vigilance and proactive adaptation. For industry professionals aiming to maintain a competitive edge, it’s crucial to stay informed about the latest regulatory developments affecting the global financial markets. In this update, we provide a curated selection of essential regulatory changes from various regions around the world.
Business Line/ Sector | Country | Regulator | Rule/Regulation | Summary |
All | UK | GOV.UK | HM Treasury | Improving the effectiveness of the Money Laundering Regulations | HM Treasury has launched a consultation to enhance the effectiveness of the Money Laundering Regulations (MLRs) by addressing identified issues and minimizing burdens on legitimate customers. This initiative is part of a broader effort outlined in the Economic Crime Plan 2023-26 aimed at reducing money laundering. The consultation focuses on streamlining customer due diligence, strengthening system coordination, clarifying the scope of the MLRs, and reforming registration requirements for the Trust Registration Service. Stakeholders, including regulated businesses, supervisory bodies, law enforcement, and civil society, are encouraged to participate. Additionally, a cost of compliance survey and virtual events are being conducted to gather insights and facilitate discussions on the proposed changes. |
USA | SEC | The Securities and Exchange Commission (SEC) has announced a delay in the effective date of the Final Rules titled “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” Originally scheduled to become effective on May 28, 2024, the implementation of these rules is now postponed indefinitely. This delay is pending the completion of judicial review in consolidated proceedings in the Eighth Circuit. The Commission emphasizes its commitment to defending the validity of the Final Rules in court while ensuring an orderly resolution of the litigation. The decision to delay the rules aims to prevent regulatory uncertainty and allow for a focused judicial consideration of the challenges raised. | ||
Global | FSB | The Financial Stability Board (FSB) Regional Consultative Group (RCG) for Europe convened in Dublin to discuss various issues affecting financial stability. Members examined global and regional macroeconomic developments, noting concerns over stretched asset valuations and vulnerabilities in commercial real estate markets. A key focus was the implementation of the global regulatory framework for crypto-assets, with discussions covering challenges related to cross-border activities and forthcoming regulations in the European Union and the United Kingdom. Additionally, the group addressed the evolving role of artificial intelligence (AI) in the financial system, reflecting on its potential implications for stability. The RCG’s seminar on AI provided insights from academia and industry on its use cases and developments in the financial sector. The FSB’s work priorities for 2024, including its responsibilities under Brazil’s G20 Presidency, were also reviewed. | ||
Australia | ASIC | ASIC consults on misconduct reporting guidance for external administrators and controllers | ASIC has released a consultation paper proposing updates to its regulatory guidance for external administrators and controllers regarding the reporting and lodging of statutory reports concerning alleged misconduct. These updates aim to enhance clarity on ASIC’s expectations regarding compliance with reporting obligations and its approach to the received reports. The consultation follows feedback from industry associations, professional bodies, and recommendations from the Parliamentary Joint Committee. ASIC anticipates that these proposed updates will streamline reporting requirements, reducing unnecessary effort and expenses. The reporting obligations serve as a crucial information source for ASIC on potential offenses or misconduct by companies, aiding in monitoring ‘phoenix’ behaviour, administrative actions, and enforcement actions. Feedback on the proposed updates to Regulatory Guide 16 is invited until June 6, 2024, considering various developments such as case law expansion, legislative reforms, and insights from the Parliamentary Joint Committee’s inquiry into corporate insolvency in Australia. | |
South Africa | FIC | Invitation For Public Submissions on Draft Amendments to The | The Minister of Finance, Mr Enoch Godongwana, has issued Gazette Notice 50450 no 4712 on 08 April 2024, inviting public comments and written submissions on draft amendments to the Money Laundering and Terrorist Financing Control Regulations. These amendments, proposed under section 77(5)(a) of the Financial Intelligence Centre Act, 2001, aim to strengthen South Africa’s anti-money laundering and counter-terrorist financing efforts by enhancing reporting requirements for the conveyance of cash or bearer negotiable instruments into or out of the country. The proposed amendments seek to expand the Financial Intelligence Centre’s (FIC) operational capabilities by providing it with additional information on cross-border financial flows, facilitating the detection of suspicious activity. The Minister proposes setting a reporting threshold of R24,999.99 and authorizing Customs Officers to receive reports on cash conveyance in coordination with the South African Revenue Service (SARS). Written comments and submissions are welcomed until 19 April 2024, with the draft amendments and explanatory memorandum available on the National Treasury website. | |
Europe | INREV | The UK Transition Plan Taskforce (TPT) released guidance on April 9th, endorsing ESG metrics for real estate proposed by INREV and other industry associations in January 2024. These metrics, covering environmental and social aspects, aim to gauge the strategic ambition of transition plans, enhancing transparency and consistency in ESG reporting crucial for real estate investors and managers. The industry appreciates TPT’s collaboration in developing the guidance, with the UK’s FCA planning to update its transition plans disclosures based on this guidance, aligning with its SDR policy. There’s also an intention to advocate for EU policymakers to incorporate these ESG metrics into their guidance. Links to access the guidance are provided for both asset managers and owners. | ||
Malaysia | AMLCFT.BNM | The Central Bank of Malaysia issued a notice to various financial entities on April 5, 2024, informing them of amendments to the Anti-Money Laundering and Anti-Terrorism Financing regulations. These changes, outlined in the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities (Declaration of Specified Entities and Reporting Requirements) (Amendment) Order 2024, involve adding three new specified individuals and removing three others from the list. Financial institutions are directed to take measures regarding the new specified entities, including reporting property ownership, freezing assets, and submitting suspicious transaction reports. Failure to comply may result in regulatory action, and reporting templates are provided online for convenience. | ||
Canada | Fintrac-Canafe | FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada, has released updated compliance guidance effective April 6, 2024, detailing the obligation to report suspicious transactions. This guidance supersedes previous versions and includes information on who must comply, what constitutes a suspicious transaction, grounds for suspicion, reporting procedures, form submission, and common deficiencies to avoid. Additionally, fictitious examples are provided to illustrate reporting requirements. The document also offers field instructions and scenarios for reference, emphasizing the importance of accurate and timely reporting to combat money laundering and terrorist financing. | ||
Banking | European Union | European Union | Regulation on Basel III Finalization and Amendments to EU Directives | The General Secretariat of the Council of the European Union issued an information note (document no. 8436/24) on April 12, 2024, regarding the finalization of Basel III. This note pertains to two proposals: a directive amending Directive 2013/36/EU concerning supervisory powers, sanctions, third-country branches, and environmental, social, and governance risks, and a regulation amending Regulation (EU) No 575/2013 concerning credit risk, credit valuation adjustment risk, operational risk, market risk, and the output floor. The note also includes a list of working papers distributed between July 1 and December 31, 2023, which address specific issues related to Basel III, such as the exclusion of certain development banks from the scope of the Capital Requirements Directive (CRD). |
South Africa | Reserve bank | The directive, issued under section 6(6) of the Banks Act 94 of 1990 in South Africa, proposes amendments to the Regulations relating to Banks. It outlines the integration of Basel III post-crisis reforms into the regulatory framework, emphasizing the commitment to international standards. Notably, the directive aims to remove Banks Act returns (BA returns) and related directives from the Regulations, transitioning them into separate Directives or Determinations. The proposed changes are intended to streamline regulatory processes and support ongoing initiatives like the Umoja System Implementation Project, with stakeholders invited to submit comments by May 24, 2024, regarding the proposed Government Notice and implementation date of October 1, 2024. | ||
UK | FCA | On April 10, 2024, FCA released the Policy Statement PS24/2, outlining final rules aimed at strengthening protections for borrowers in financial difficulty, particularly focusing on consumer credit and mortgages. The statement summarizes feedback received on the consultation paper CP23/13 and outlines the final rules in response. The changes include incorporating relevant components of the Tailored Support Guidance (TSG) into the Handbook, enhancing customer engagement expectations, and broadening forbearance options. Stakeholders largely supported the proposals, resulting in minor amendments to clarify certain aspects. The rules come into force on November 4, 2024, with an implementation period of just over 6 months to allow firms to adopt the necessary changes. Ongoing monitoring will assess the impact of the intervention on customers in financial difficulty, ensuring continued support and appropriate outcomes. | ||
UK | FCA | CP24/6: FCA regulated fees and levies: rates proposals for 2024/25 | The Consultation Paper CP24/6, published by the Financial Conduct Authority (FCA), outlines proposed rules for raising regulatory fees and levies in the fiscal year 2024/25 to fund the FCA, the Financial Ombudsman Service (Ombudsman Service), and certain government departments. The consultation primarily concerns all FCA fee-payers, including businesses seeking FCA authorization or registration. It covers various fee categories such as FCA periodic fee-rates, application fees, and levies related to the Ombudsman Service, money guidance, debt advice, pensions guidance, and illegal money lending. The paper also includes consequential amendments to the FEES Manual. The consultation seeks feedback on the proposed changes and invites comments until May 14, 2024, with plans to publish feedback and final rules in July 2024. | |
Hong Kong | HKMA | Guideline on the Application of the Banking (Disclosure) Rules | The document titled “Supervisory Policy Manual CA-D-1 Guideline on the Application of the Banking (Disclosure) Rules” is a non-statutory guideline issued by the Monetary Authority to provide interpretative guidance to Authorized Institutions (AIs) on applying the Banking (Disclosure) Rules, Cap. 155M. It offers detailed explanations on terms used, the structure and requirements for disclosures, including principles for clear, comprehensive, and meaningful disclosures that are consistent over time and comparable across banks. The manual also outlines penalties for non-compliance and includes sections on the application of disclosure rules, exemptions, and specific guidance for both AIs incorporated in Hong Kong and those incorporated outside Hong Kong. The document also discusses the implementation of the Basel III Pillar 3 disclosure framework. It specifically notes that the Banking (Disclosure) Rules (BDR) were principally utilized by the Hong Kong Monetary Authority (HKMA) to implement the Pillar 3 framework under the Basel standards, excluding aspects related to loss-absorbing capacity, which are outlined in separate rules. | |
UK | PSR | The Payment Systems Regulator (PSR) Annual Plan for 2024/25 outlines the organization’s strategic direction and budget for the upcoming fiscal year, highlighting its continued commitment to enhancing the UK’s payment systems. The plan emphasizes the importance of payments in supporting domestic and international trade and fostering opportunities for the fintech sector. Key focuses for the year include managing the midpoint of the PSR’s five-year strategy, enhancing competition, improving transparency, and protecting users through initiatives like the expanded Confirmation of Payee requirements. The plan also addresses the ongoing challenges and opportunities posed by digital payment methods and the integration of new technologies such as distributed ledger technology. With a budget set at £28.0 million, the PSR aims to consolidate its efforts, engage with stakeholders, and continue to provide effective regulation and oversight to ensure that payment systems remain efficient, competitive, and aligned with users’ needs. | ||
Banks and Insurers | UK | BOE | The Prudential Regulation Authority (PRA) Business Plan for 2024/25 outlines its strategies and objectives for the upcoming fiscal year, focusing on enhancing the safety and soundness of the banking and insurance sectors. Key initiatives include implementing the Basel 3.1 standards, enhancing operational and cyber resilience, and supporting the competitiveness and growth of the financial markets through streamlined regulatory frameworks under the new Financial Services and Markets Act. The plan emphasizes the PRA’s commitment to adapting to emerging risks, fostering international policy development, and maintaining robust supervisory and enforcement practices to ensure the stability and resilience of the financial system. | |
UK | FCA | The Financial Conduct Authority (FCA) has updated its guidance for firms supporting existing mortgage borrowers affected by the rising cost of living, effective from November 4, 2024. This update aligns with the FCA’s policy statement (PS 24/2), and final rules aimed at strengthening protections for borrowers facing financial difficulties. The guidance outlines how firms can provide forbearance to customers in need, emphasizing fairness, professionalism, and the importance of offering appropriate options tailored to individual circumstances. It also addresses contract variations, interest rate switches, term extensions, and other measures to reduce monthly payments, providing clarity on affordability assessments and disclosure requirements. Additionally, exceptions to the requirement to provide advice are detailed, allowing firms greater flexibility in offering support, particularly through digital channels. | ||
China | GOV.CN | China bolsters online consumer protection with new regulations | China has introduced new regulations aimed at bolstering consumer protection in online transactions, set to take effect on July 1, 2024. These regulations, announced by the State Administration for Market Regulation (SAMR), target various issues in online consumption, such as forging business data, promoting bundle sales, and engaging in price discrimination based on big data. The move comes in response to a significant increase in complaints and inquiries related to online consumption, which now make up 56 percent of total consumer grievances in the country. The regulations also address concerns regarding auto subscription renewals and establish provisions for hassle-free returns. With over 900 million online shoppers in China, accounting for a significant portion of total retail sales, the SAMR aims to collaborate with other departments to further optimize the online consumption environment and tackle emerging challenges in the sector. | |
Investment | UK | FCA | “CP24/7 Payment Optionality for Investment Research,” outlines the Financial Conduct Authority’s (FCA) consultation on introducing new payment options for investment research. This initiative is part of the UK government’s broader Edinburgh Reforms aimed at enhancing the competitiveness and growth of the UK’s financial services. The consultation proposes allowing asset managers more flexibility in how they pay for third-party research, including the possibility of bundling payments for research with trade execution services. This approach seeks to address operational complexities and competitive disadvantages faced under the current regime, which can inhibit UK asset managers’ ability to access and fund international research. The FCA is soliciting feedback on this proposal by 5th June 2024, with the goal of refining and potentially implementing these new rules in the first half of 2024. | |
USA | SEC | Exemption for Certain Investment Advisers Operating Through the Internet | The Securities and Exchange Commission (SEC) has adopted amendments to the rule under the Investment Advisers Act of 1940 that exempts certain investment advisers providing services through the internet from the prohibition on Commission registration. These amendments, effective from July 8, 2024, aim to modernize the rule’s conditions to reflect technological advancements and industry changes since its adoption in 2002. The amendments require internet investment advisers to exclusively provide investment advice through an operational interactive website and eliminate the de minimis exception allowing fewer than 15 non-internet clients. Amendments to Form ADV are also included to align with the revised Internet Adviser Exemption. This move follows a proposal in July 2023 and considers feedback from eight comments received, with most expressing support for the proposal. The amendments seek to better regulate advisers in line with the evolving landscape of technology and investment practices while enhancing investor protection and optimizing regulatory oversight and examination resources. | |
USA | SEC | The Securities and Exchange Commission (SEC) has adopted technical amendments to various rules and forms under the Securities Exchange Act of 1934 and the Investment Company Act of 1940. These amendments reflect a federal court’s vacatur of rule amendments made on May 3, 2023, pertaining to disclosures about repurchases of an issuer’s equity securities registered under the Exchange Act (the Repurchase Rule). Effective from April 8, 2024, these technical amendments revise the Code of Federal Regulations (CFR) to align with the court’s vacatur, which reverted the rules and forms to pre-Repurchase Rule state. These changes were made without the requirement for notice and public comment, given their nature as reflecting the vacatur rather than imposing new substantive regulatory requirements. |
By staying informed about these regulatory developments, financial industry professionals can proactively adapt their strategies, mitigate risks, and capitalize on emerging opportunities. Embracing a proactive approach to regulatory compliance will not only ensure adherence but also foster resilience and long-term success in the ever-evolving financial landscape.
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