In an ever-evolving financial landscape, staying abreast of regulatory changes is crucial for market participants worldwide. This week’s global regulatory roundup highlights significant developments that could reshape various sectors of the financial industry. As financial institutions navigate these changes, they must adapt their strategies and operations to ensure compliance while seizing new opportunities in an increasingly complex global financial ecosystem.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | Guernsey | GFSC | The Bailiwick of Guernsey has released a discussion paper titled “The Future of Sustainability Reporting in the Bailiwick of Guernsey,” aiming to address the global environmental sustainability crisis through enhanced sustainability reporting. This paper invites feedback from stakeholders on adopting international sustainability reporting standards, particularly those set by the International Sustainability Standards Board (ISSB). The discussion highlights the need for consistent, transparent sustainability disclosures to attract international investors and support global efforts against climate change. Stakeholders can submit their feedback via the Commission’s website by October 25, 2024. The initiative underscores Guernsey’s commitment to maintaining high standards without imposing undue bureaucracy, ultimately contributing to the island’s financial sector strength and environmental responsibility. | |
Italy | BancadItalia | Italy Aligns National Legislation with EU Crypto-Asset Market Regulation | Massimo Doria, Vice Head of the Currency Circulation and Retail Payments Department at the Bank of Italy, testified before the Senate’s Finance and Treasury Committee regarding the national alignment with the EU Regulation 2023/1114 on crypto-asset markets (MiCAR). MiCAR introduces harmonized rules for the issuance, public offering, and trading of crypto-assets within the EU. The regulation aims to ensure orderly market functioning and mitigate risks associated with crypto-assets, which have seen significant growth globally. The national legislative framework designates the Bank of Italy and Consob as the competent authorities for supervision, reflecting a balance between risk management and market transparency. The full application of MiCAR is set for December 30, 2024, with initial provisions for electronic money tokens (EMTs) and asset-referenced tokens (ARTs) effective from June 30, 2024. The regulation’s implementation seeks to foster innovation, security, and efficiency in the financial sector, while also addressing challenges in monitoring decentralized finance models. | |
Italy | BancadItalia | The Bank of Italy has initiated a public consultation on proposed amendments to its “Regulations on organization, procedures, and internal controls to prevent money laundering and terrorist financing” and the “Manual for periodic AML reporting.” The consultation aims to gather feedback on the new requirements for financial intermediaries to submit structured, periodic AML/CFT reports. These amendments are designed to enhance the efficiency and effectiveness of data collection and risk analysis processes, addressing limitations in current reporting practices. Stakeholders, including supervised intermediaries and relevant associations, are invited to submit comments within 45 days of the document’s publication. The final regulatory text will be shaped by the feedback received and published on the Bank of Italy’s website. | ||
Malta | MFSA | Draft Regulatory Technical Standards on Subcontracting ICT Services | The Malta Financial Services Authority (MFSA) has announced the submission of the Draft Regulatory Technical Standards (RTS) on subcontracting ICT services under Regulation (EU) 2022/2554 on Digital Operational Resilience for the Financial Sector to the European Commission. This update follows the January 2023 circular on the Regulation, which will be supplemented by various Technical Standards and Guidelines. The RTS, developed by the European Supervisory Authorities (ESAs) after an interinstitutional drafting process and public consultation, outline the requirements for financial entities to determine and assess when subcontracting ICT services supporting critical or important functions. The European Commission will review the RTS, aiming to adopt them in the coming months. | |
Nigeria | FRC | The Financial Reporting Council of Nigeria (FRC) has released new guidance for management on evaluating and assessing Internal Control Over Financial Reporting (ICFR). This guidance provides a comprehensive framework for management to conduct a top-down, risk-based evaluation of their ICFR systems. It includes directives on identifying financial reporting risks, evaluating the design and operation of internal controls, and maintaining adequate documentation to support these assessments. The guidance emphasizes management’s responsibility to ensure the reliability of financial reporting, in compliance with the Financial Reporting Act of 2011. The FRC also encourages management to utilize recognized control frameworks like COSO for these evaluations, ensuring high standards of financial reporting and corporate governance across Nigerian public interest entities. | ||
European Union | AFME | The Association for Financial Markets in Europe (AFME) has released a report titled “Digital Finance in the EU – Priorities for Fostering Resilient, Innovative, and Competitive Financial Markets.” The report outlines key recommendations to enhance EU capital markets and improve access to finance through the adoption of new technologies. It emphasizes the potential of Distributed Ledger Technology (DLT) to increase efficiencies and expand market access via tokenised securities, the importance of a robust Financial Data Access (FiDA) framework, the need for a balanced implementation of the Digital Operational Resilience Act (DORA), and the transformative opportunities presented by artificial intelligence (AI). These priorities aim to support the development of resilient and innovative financial markets in the EU. | ||
United States | SEC | U.S. Federal Agencies Propose Joint Data Standards for Financial Regulatory Reporting | In response to the Financial Data Transparency Act of 2022, eight U.S. federal agencies, including the Office of the Comptroller of the Currency (OCC), Federal Reserve System, and Securities and Exchange Commission (SEC), have proposed a new rule to establish joint data standards for financial regulatory reporting. This initiative aims to enhance the interoperability and quality of financial data across agencies, facilitating more efficient and transparent regulatory oversight. The proposed standards include the use of the Legal Entity Identifier (LEI) for legal entities, the Financial Instrument Global Identifier (FIGI) for financial instruments, and ISO standards for data formats. The full proposal and instructions for submitting comments are available on the respective agencies’ websites. | |
Banking | Australia | APRA | APRA Maintains Macroprudential Policy Settings Amid Economic Uncertainty | The Australian Prudential Regulation Authority (APRA) has decided to maintain its current macroprudential policy settings following a thorough quarterly assessment of both domestic and international economic conditions. APRA’s macroprudential toolkit, designed to ensure systemic financial stability, includes the countercyclical capital buffer, serviceability buffer, and limits on bank lending. Considering high household debt, inflation above the Reserve Bank of Australia’s target, and geopolitical instability, APRA will retain the countercyclical capital buffer at 1.0%, the mortgage serviceability buffer at 3 percentage points, and continue without applying lending limits. Despite rising arrears rates, they remain below Covid peaks, and the quality of new housing lending is robust. APRA Chair John Lonsdale emphasized the importance of these policies in safeguarding the financial system against potential risks and reiterated APRA’s commitment to monitoring the environment closely and adjusting policies as necessary. |
Bahamas | CBB | The Central Bank of The Bahamas has announced a 30-day consultation period for its newly released Consultation Paper on a Regulatory Sandbox. This initiative aims to bolster the Bank’s supervisory capabilities, allowing financial technology innovators and service providers to test new products, services, and technology platforms in a controlled, regulatory environment. The Sandbox will ensure consumer protection and financial stability while fostering innovation. The consultation paper details the proposed Sandbox framework, including eligibility criteria and the regulatory lifecycle stages for participants. Stakeholders are invited to review the document, available on the Central Bank’s website and submit feedback by August 31, 2024. | ||
European Union | EBA | The European Banking Authority (EBA) has issued a consultation paper on the Draft Implementing Technical Standards (ITS) for reporting information for resolution planning, in line with Directive 2014/59/EU. This proposal aims to update and replace Regulation (EU) 2018/1624 to improve data harmonization and efficiency. The new ITS framework introduces significant changes, such as earlier submission deadlines, revised thresholds for relevant legal entities (RLEs), granular reporting of liabilities, and additional data requirements for critical functions and services. The consultation seeks feedback on the proposed standards, which aim to streamline resolution planning and crisis preparedness across EU financial institutions. Stakeholders are invited to submit their comments by October 30, 2024. The EBA will finalize the ITS post-consultation, aiming for implementation by 2026, with the first reporting reference date set for December 31, 2025. | ||
European Union | European Union | Amendments to Directive 2013/36/EU on Credit Institutions and Prudential Supervision | The European Parliament and Council have introduced significant amendments to Directive 2013/36/EU, governing access to the activity of credit institutions and their prudential supervision. The latest changes, effective from 31 May 2024, include enhanced supervisory measures and stricter reporting requirements for credit institutions, particularly those with branches in third countries. Notably, these amendments emphasize improved cooperation between supervisory authorities across the EU to ensure comprehensive monitoring and stability of the financial system. Additionally, the amendments introduce specific provisions for financial holding companies, mixed financial holding companies, and systemic risk buffers, aiming to strengthen the resilience and transparency of the EU’s banking sector. These updates reflect the EU’s ongoing commitment to maintaining robust financial oversight and adapting to evolving global financial standards. | |
Malta | MFSA | Implementation of the Credit Servicers and Credit Purchasers Act | The Malta Financial Services Authority (MFSA) has announced the publication of the Credit Servicers and Credit Purchasers Act, alongside relevant regulations and conduct of business rules, effective from 1 August 2024. This legislative framework transposes Directive (EU) 2021/2167, commonly known as the NPL Directive, which aims to mitigate the accumulation of non-performing loans (NPLs) and foster a secondary market for such loans within the EU. Key components of the Act include the authorisation process for credit servicers, the obligations of credit purchasers, and enhanced supervisory cooperation. Additionally, the Act introduces passporting regulations to facilitate cross-border operations within the EU and stringent conduct rules to protect borrowers’ rights during loan transfers. The framework also sets out specific fee structures and detailed application procedures to ensure compliance and operational transparency among credit servicers. | |
Nigeria | CAC | Guidelines for Recapitalization of Banks and Financial Institutions | The Corporate Affairs Commission (CAC) of Nigeria has issued new guidelines for the recapitalization of banks and other financial institutions, pursuant to Section 8 (1) (e) of the Companies and Allied Matters Act (CAMA) No. 3 of 2020. The guidelines cover procedures for new incorporations, increasing share capital, mergers, and changes in license authorization. Key requirements include approved name reservations, sector regulatory approvals, completed incorporation forms, and payment of necessary fees. Additionally, specific steps and documentation are mandated for share capital increases and mergers, ensuring regulatory compliance and transparency. These measures aim to streamline the recapitalization process and maintain up-to-date regulatory standards, enhancing financial stability and operational efficiency in Nigeria’s financial sector. | |
United Kingdom | BOE | The Bank of England has published a policy statement (PS14/24) outlining the updated leverage ratio treatment of omnibus account reserves, effective August 5, 2024. This policy extends the exclusion of central bank claims from the leverage ratio to include reserves held in omnibus accounts, provided they meet specific additional conditions. This change aligns the treatment of these reserves with traditionally held reserves, ensuring consistency across reserve types. Additionally, minor amendments have been made to the leverage ratio framework, including updates to the supervisory statement SS45/15, disclosure instructions, and reporting requirements to enhance clarity and regulatory compliance. These updates are part of the Bank’s ongoing efforts to adapt to evolving financial practices and maintain the stability and transparency of the financial system. | ||
United Kingdom | UK Finance | UK National Payment API Framework: Standards and Best Practices | The Bank of England and Pay.UK, with the support of the Standards Advisory Panel (SAP) and UK Finance’s Standards Engagement Forum (SEF), have introduced a new best practice framework for payment APIs in the UK. This initiative aims to standardize the design and implementation of APIs, mitigating risks of divergence and fragmentation in the rapidly evolving payments ecosystem. The framework provides comprehensive recommendations on critical aspects such as versioning and security, drawing from ISO-led standardisation efforts and industry experiences. It serves as a valuable resource for developers, maintainers, and monitors of UK payment APIs, promoting innovation and efficiency in financial services. Stakeholders are invited to provide feedback on the framework by August 26, 2024. This input will be incorporated into the final version of the guidance, which will be regularly updated to ensure its continued relevance and accuracy. | |
United States | Federal Register | The Office of the Comptroller of the Currency (OCC), the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) are undertaking a comprehensive review of their regulations pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA). This initiative aims to identify and address outdated, unnecessary, or overly burdensome regulatory requirements on insured depository institutions and their holding companies. Over the next two years, the agencies will publish four Federal Register documents inviting public comments on various categories of regulations. The second document, recently published, solicits feedback on regulations concerning Consumer Protection, Directors, Officers, and Employees, and Money Laundering. This process provides an opportunity for the public and industry stakeholders to suggest amendments or repeals that could alleviate regulatory burdens while maintaining essential consumer protections and ensuring the safety and soundness of the financial system. The agencies will review all comments and may undertake rulemaking to amend or repeal regulations as appropriate, often in a coordinated interagency manner. | ||
Insurance | European Union | EIOPA | Consultation Paper on Implementing Proportionality Measures under Solvency II | The European Insurance and Occupational Pensions Authority (EIOPA) released a consultation paper detailing the implementation of a new proportionality framework under the Solvency II Directive. This framework aims to refine the application of proportionality measures to better align regulatory requirements with the nature, scale, and complexity of the risks faced by insurance and reinsurance undertakings. The framework introduces clear criteria for identifying small and non-complex undertakings and groups, enabling them to benefit from certain proportionality measures. Additionally, it sets out conditions for granting or withdrawing supervisory approval for these measures, even for entities that do not meet the criteria but have a lower risk profile. EIOPA’s recommendations emphasize the importance of a balanced approach, incorporating both qualitative and quantitative assessments to ensure supervisory convergence and predictability. Stakeholders are invited to comment on the consultation paper until October 25, 2024. |
European Union | EIOPA | Consultation on Insurers’ Direct Exposures to Qualifying Central Counterparties | The European Insurance and Occupational Pensions Authority (EIOPA) released a consultation paper to gather feedback on the standard formula capital requirements for insurers’ direct exposures to qualifying central counterparties (QCCPs). The initiative responds to the European Commission’s call for technical advice to ensure that capital requirements for direct clearing exposures appropriately reflect the risk-reducing role of QCCPs. Currently, EEA insurers engage with CCPs indirectly through clearing members, but new models allowing direct membership have emerged. EIOPA’s draft advice proposes aligning the treatment of direct exposures with that of indirect exposures and harmonizing default fund contributions with the Capital Requirements Regulation (CRR) framework. This alignment aims to enhance consistency and risk sensitivity in capital treatment, thereby encouraging insurers to become direct clearing members. Stakeholders are invited to submit comments by October 23, 2024. | |
United Kingdom | FCA | DP24/1: Regulation of Commercial and Bespoke Insurance Business | The Financial Conduct Authority (FCA) has released Discussion Paper DP24/1, addressing the regulation of commercial and bespoke insurance business in the UK. This paper aims to evaluate whether current regulatory frameworks effectively balance consumer protection and market competitiveness. The FCA is considering changes to rules that apply to commercial insurance, specifically focusing on distinguishing rules for small and medium-sized enterprises (SMEs) versus larger commercial customers. It also examines co-manufacturers of insurance products and the bespoke insurance product market. The discussion includes potential adjustments to definitions, product governance, and consumer protections to better align with the needs of different customer groups. Stakeholders are invited to provide feedback by 16 September 2024, which will inform any future regulatory amendments. | |
Investment | Canada | FCNB | The Canadian Securities Administrators (CSA) have issued a Notice and Request for Comment on proposed amendments to various National Instruments and Policies. Key changes include the introduction of a Senior Tier by the Canadian Securities Exchange (CSE) for non-venture issuers, which will now be excluded from the “venture issuer” definition and regulated similarly to other non-venture exchanges. The proposal also aims to align exemptions and eligibility requirements for the CSE with similar exchanges, codify CSA members’ blanket orders related to “majority voting” under the Canada Business Corporations Act, update exchange names, and remove the witness requirement for escrow agreements. The 90-day comment period ends on October 30, 2024. | |
France | AMF | Filing of PSCA Approval Applications with the AMF under MiCA Regulation | As of July 1, 2024, applications for approval to become a crypto-asset service provider can now be submitted to the Financial Markets Authority (AMF) in France, in anticipation of the European MiCA regulation. Scheduled to take full effect on December 30, 2024, MiCA mandates prior authorization for ten specific crypto-asset services within the European Union, including custody, trading platform operation, and crypto-asset consulting. Service providers must adhere to stringent rules concerning anti-money laundering, cybersecurity, and governance. For existing French providers under the PACTE law, a transitional period extends until June 30, 2026, to secure MiCA approval. During this period, European passport benefits are unavailable without MiCA authorization. The AMF encourages early preparation due to the heightened requirements compared to French regulations and offers a dedicated thematic file to assist providers in understanding and complying with the new framework. | |
Germany | BaFin | New Regulation on Supervisory Requirements for Remuneration Systems | The Federal Financial Supervisory Authority (BaFin) has released a new regulation on the supervisory requirements for the remuneration systems of medium-sized investment firms, effective January 12, 2024. This regulation, detailed in the Investment Firm Remuneration Regulation (Wertpapierinstituts-Vergütungsverordnung), mandates that investment firms align their remuneration systems with business and risk strategies. Key provisions include the identification of risk takers, responsibilities of management and supervisory boards, appropriateness of remuneration, and specific rules for variable remuneration and discretionary pension benefits. The regulation emphasizes gender-neutral remuneration, avoidance of conflicts of interest, and the inclusion of both financial and non-financial performance parameters. Additionally, it outlines stringent documentation and compliance requirements to ensure transparency and effective risk management. This move aims to enhance the integrity and stability of the financial sector by ensuring that remuneration practices do not incentivize excessive risk-taking. | |
Japan | JFSA | The Japan Securities and Exchange Surveillance Commission (SESC) has outlined its primary inspection points for securities monitoring in the fiscal year 2024. The policy emphasizes ensuring financial service providers conduct operations in the best interest of their clients, focusing on appropriate product composition, sales, and management practices. Key areas include countering fraudulent investment solicitations, adapting to digitalization, enhancing cyber security measures, and reinforcing anti-money laundering and counter-terrorism financing protocols. Additionally, the SESC will monitor compliance with regulatory changes, such as the amended Financial Instruments and Exchange Act, and promote sustainable business models amid evolving market conditions. The policy also underscores the importance of robust governance structures within large financial institutions and proactive measures against unregistered operators to protect investors. | ||
Romania | ASF | The Financial Supervisory Authority (ASF) of Romania has issued a draft regulation to amend Article 4, paragraph (6) of ASF Regulation No. 3/2013, which governs the authorization and operation of central counterparties in line with EU Regulation No. 648/2012 on OTC derivatives, central counterparties, and trade repositories. The amendment stipulates that central counterparties must submit additional information to the ASF within a maximum of 21 months from the ASF’s request, modifying the previous timeframe for such submissions. This regulatory update aims to enhance compliance and operational efficiency of central counterparties. Applications for authorization that are pending at the time this regulation takes effect will be updated and resolved in accordance with the new provisions. The regulation will be published in the Official Gazette of Romania, Part I, and will come into effect upon publication.
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Singapore | MAS | Guidelines on Licensing and Conduct of Business for Fund Management Companies | The Monetary Authority of Singapore (MAS) has issued a comprehensive update to its Guidelines on Licensing and Conduct of Business for Fund Management Companies (FMCs), effective from August 1, 2024. These guidelines are applicable to companies holding a capital markets services licence for fund management. They detail the minimum licensing criteria, business conduct requirements, and ongoing obligations for FMCs, including Retail Licensed Fund Management Companies (Retail LFMCs), Accredited/Institutional Licensed Fund Management Companies (A/I LFMCs), and Venture Capital Fund Managers (VCFMs). Key updates include enhanced requirements for fit and proper criteria, competency of key individuals, compliance arrangements, and risk management frameworks. FMCs must ensure independent custody and valuation of assets under management, disclose conflicts of interest, and maintain robust internal audit practices. | |
Singapore | MAS | The Monetary Authority of Singapore (MAS) has issued a consultation paper on proposed legislative amendments to enhance pre- and post-transaction safeguards for retail clients. These amendments, detailed in the Notices FAA-N16, FAA-N20, and Guidelines FAA-G14, aim to strengthen consumer protection through various measures. Key proposals include introducing pre-transaction checks, mandatory audio recordings of pre-transaction call-backs, and enhanced requirements for documentation and trusted individuals during investment recommendations. Additionally, the amendments propose rigorous checks for clients transacting in non-recommended products. MAS invites stakeholders to provide feedback on these proposed changes by August 30, 2024, to ensure a robust framework that promotes transparency and client protection in financial advisory services. The consultation highlights MAS’s ongoing commitment to fostering a secure and fair financial environment for retail clients in Singapore. | ||
Singapore | MAS | Guidelines on Liquidity Risk Management for Fund Management Companies | The Monetary Authority of Singapore (MAS) has revised its Guidelines on Liquidity Risk Management Practices for Fund Management Companies (FMCs), effective from August 1, 2024. These guidelines, under the Securities and Futures Act 2001, aim to provide comprehensive guidance to FMCs holding a capital markets services license for fund management. The updated guidelines emphasize the importance of sound liquidity risk management throughout the lifecycle of collective investment schemes (CIS). Key components include the necessity for effective governance and accountability within FMCs, the implementation of robust liquidity risk management frameworks, and the adoption of international best practices, such as those issued by the International Organisation of Securities Commissions (IOSCO). The guidelines also stress the importance of FMCs conducting regular stress testing, maintaining adequate liquidity management tools, and ensuring transparent communication with investors. FMCs are required to tailor their liquidity risk management practices to the size, scale, and complexity of their business, as well as the specific profile of the funds they manage | |
United Kingdom | FCA | The Financial Conduct Authority (FCA) has released Policy Statement PS24/10, detailing the second phase of the Dormant Assets Scheme (DAS) expansion under the Dormant Assets Act 2022. This phase includes dormant assets from sectors such as insurance, pensions, securities, investment assets, and client money. Following a consultation period that ended in July 2023, the FCA has refined its proposals based on stakeholder feedback. Key outcomes include enabling Reclaim Fund Limited (RFL) to accept contributions from these sectors and ensuring consumers can reclaim dormant assets without undue difficulty. The expansion aims to release approximately £240 million for social and environmental initiatives while maintaining robust consumer protection mechanisms. Firms participating in the DAS will need to adhere to updated rules in the FCA Handbook to ensure smooth implementation and operation of the scheme. |
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