Navigating the constantly evolving landscape of financial markets can be challenging, especially with the ever-increasing emphasis on transparency, sustainability, and risk management. Recent developments in regulatory standards are set to impact various aspects of the financial sector, from investment strategies and cybersecurity to corporate governance and consumer protection.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | Australia | ASIC | The Australian Securities and Investments Commission (ASIC) has escalated its efforts to combat greenwashing, conducting 47 regulatory interventions from April 2023 to June 2024. These actions include Federal Court proceedings and over $123,000 in infringement notice payments, targeting misleading claims in sustainable finance-related products and services. ASIC’s Report 791 details these interventions, focusing on inadequate disclosures, inconsistent ESG practices, and unsubstantiated sustainability claims. The regulator emphasizes the importance of accurate, transparent communication to maintain investor trust and market integrity, especially with upcoming mandatory climate-related financial disclosure requirements. | |
Australia | ASIC | ASIC Corporate Plan 2024-25: Strategic Focus on Emerging Risks and Regulatory Enhancements | The Australian Securities and Investments Commission (ASIC) has released its Corporate Plan for 2024-25, outlining its strategic priorities for the next four years. Key focus areas include enhancing consumer outcomes, addressing climate change risks in the financial system, advancing digital and data resilience, improving retirement outcomes, and ensuring market integrity. ASIC is particularly committed to combating greenwashing, strengthening cyber and operational resilience, and improving services for superannuation members. The plan also highlights ASIC’s commitment to adapting its regulatory capabilities in response to technological advancements, economic pressures, and the evolving needs of the Australian financial system. Through these efforts, ASIC aims to maintain a fair, strong, and efficient financial system that protects consumers and fosters market integrity. | |
Chile | CMF | Regulatory Challenges in Chile’s Financial System: Focus on Open Finance and Cybersecurity | In August 2024, Solange Berstein Jáuregui, President of the Comisión para el Mercado Financiero (CMF), outlined the regulatory challenges facing Chile’s financial system during a presentation to the Chilean-British Chamber of Commerce. The discussion centred on the implementation of the Open Finance System under the new Fintech Law, emphasizing the critical elements and potential benefits, such as enhanced competition, financial inclusion, and innovation in financial services. Additionally, cybersecurity was highlighted as a significant and evolving risk, with the establishment of the National Cybersecurity Agency marking a pivotal step towards improving national coordination and resilience against cyber threats. The CMF’s strategy for addressing climate risks was also discussed, focusing on integrating climate-related risks into financial regulation and promoting green finance. These efforts underscore Chile’s proactive approach to adapting its financial system to emerging global challenges. | |
Chile | CMF | CMF Proposes Enhancements to Integrated Annual Report Requirements | The Financial Market Commission (CMF) of Chile initiated a public consultation on proposed regulatory amendments to General Standards No. 30 and No. 461, aimed at refining the instructions for the Integrated Annual Report. The consultation, open until September 27, 2024, seeks to align reporting standards with international benchmarks and improve the clarity and utility of sustainability and corporate governance disclosures. Key proposed changes include the adoption of the International Sustainability Standards Board’s (ISSB) IFRS S1 and S2 standards for reporting material sustainability information, with mandatory compliance starting in fiscal year 2026. Additionally, the proposal introduces greater flexibility by extending the implementation period for certain securities issuers and incorporating new requirements for reporting on diversity and inclusion policies, specifically regarding gender quotas on boards. Other adjustments aim to enhance understanding and compliance with corporate governance and workplace-related disclosures, ultimately providing investors with more comprehensive and comparable information. | |
China | TC260 | Draft National Standard on Data Security and Personal Information Protection | China has released a draft national standard titled “Data Security Technology: Guidance on Social Responsibility of Data Security and Personal Information Protection” for public consultation. This document outlines comprehensive guidelines for organizations on how to incorporate data security and personal information protection into their social responsibility practices. Key areas covered include organizational governance, compliance, innovation, fair operations, and user rights protection. The draft standard emphasizes transparency, ethical behaviour, and the importance of aligning with both local and international regulations. It also provides a framework for evaluating an organization’s performance in managing data security and personal information protection, aiming to enhance social responsibility and contribute to sustainable development. The consultation period allows stakeholders to provide feedback on the proposed guidelines before they are finalized and implemented. | |
European Union | ESMA | Guidelines on the Use of ESG and Sustainability Terms in Fund Names | The European Securities and Markets Authority (ESMA) released new guidelines to address the use of Environmental, Social, and Governance (ESG) or sustainability-related terms in the names of funds. These guidelines apply to UCITS management companies, Alternative Investment Fund Managers (AIFMs), and other relevant entities. The primary objective is to ensure that the use of such terms in fund names is not misleading, requiring that funds meet an 80% threshold of investments aligned with the claimed ESG or sustainability objectives. Additionally, funds must exclude investments in certain companies and commit to substantial sustainable investments. The guidelines, which aim to enhance transparency and investor protection, will become applicable three months after publication on ESMA’s website, with different compliance timelines for new and existing funds. | |
Germany | BaFin | Guidelines on Outsourcing and Aggregated Reporting for ICT-Related Incidents | Effective January 17, 2025, Germany’s BaFin has outlined new procedures under the Digital Operational Resilience Act (DORA) for financial companies reporting serious ICT-related incidents. Companies may either manage these reports internally or outsource the responsibility to a service provider. BaFin’s guidelines clarify that such outsourcing must be reported to BaFin before the first incident report is submitted. Additionally, service providers can submit aggregated reports on behalf of multiple companies affected by the same incident, though BaFin advises that this should only be done when the companies are legally related and under the supervision of the same authorities. These guidelines ensure compliance with DORA while offering flexibility in managing serious ICT incidents. | |
Hong Kong | HKMA | The Hong Kong Monetary Authority (HKMA) has issued a circular to share good practices observed in the governance of climate-related risks by authorized institutions (AIs). Based on recent supervisory activities, including thematic examinations, the HKMA identified key practices in fostering effective climate strategy development, overseeing climate risk management, and cultivating a strong climate risk culture. AIs have been recognized for setting climate goals, integrating climate considerations into risk management frameworks, and embedding climate risk into organizational culture through performance evaluations and disclosures. The HKMA encourages AIs to refer to these practices as they enhance their climate risk governance frameworks, acknowledging the ongoing challenges in data availability and risk measurement. | ||
Japan | JFSA | FSA Amends Rules on Financial Statements Following Public Consultation | The Financial Services Agency of Japan (FSA) has announced amendments to the rules regarding the terminology, format, and preparation methods for financial statements, following public consultation from June 14 to July 16, 2024. These changes are in response to the Accounting Standards Board of Japan’s (ASBJ) release of Practical Solution No. 46, which addresses accounting treatment and disclosure for corporate taxes under the global minimum tax regime. The consultation yielded a single comment, which the FSA addressed in its finalization of the amendments. The revised rules, which include adjustments to both the financial statements and consolidated financial statements regulations, were officially promulgated and enacted on August 22, 2024. The details of the public feedback and the FSA’s responses, along with specific amendments, are available for review. | |
Norway | Datatilsynet | Evaluation Calls for Strengthening the Norwegian Data Protection Authority | The Directorate for Administration and Financial Management (DFØ) has recommended significant resource enhancements for the Norwegian Data Protection Authority (DPA) following a comprehensive evaluation. The report highlights the DPA’s ability to achieve considerable outcomes despite limited resources but stresses the urgent need for additional support due to the growing caseload since the implementation of the General Data Protection Regulation (GDPR) in 2018. To improve efficiency, the DFØ suggests a more dialogue-based approach and a clearer professional role for the DPA. The report’s findings have been positively received by the DPA, which acknowledges the necessity for greater resources to better fulfil its responsibilities and enhance its guidance and support to public and private sectors. The DPA plans to integrate these recommendations into its strategic initiatives and operational plans moving forward. | |
Singapore | MAS | MAS Updates Reporting Requirements for Suspicious Activities and Fraud Incidents | The Monetary Authority of Singapore (MAS) has issued a revised Notice CMG-N01, effective August 20, 2024, detailing the updated procedures for reporting suspicious activities and incidents of fraud by relevant financial entities. Under this notice, entities such as licensed exchanges, trade repositories, and clearing houses are required to submit a report to the MAS within five working days of discovering any suspicious activities or incidents that could materially affect the safety, soundness, or reputation of the entity. The updated notice reaffirms the obligation to file suspicious transaction reports with the Singapore Police’s Suspicious Transaction Reporting Office and includes new guidelines on the submission of Form F1, which now requires detailed information about the incident and its impact on the financial institution. This update underscores the MAS’s ongoing commitment to enhancing the robustness of Singapore’s financial system against fraud and suspicious activities. | |
Banking | China | NFRA | Draft Interim Measures for Supervision of Microfinance Companies | The State Financial Supervision and Administration Bureau of China has released a draft of the “Interim Measures for the Supervision and Administration of Microfinance Companies” for public consultation, aiming to regulate the operations of microfinance companies and promote their healthy development. The draft addresses key issues such as extensive business management, high credit risks, and improper practices in the industry. It sets upper limits on loan balances for online microfinance companies, strengthens corporate governance, and emphasizes consumer protection. The draft also introduces a transition period for companies to comply with the new regulations, reflecting a balanced approach between stringent supervision and practical feasibility. The measures, once finalized, will supersede certain existing regulations and are part of a broader effort to enhance the stability and integrity of the microfinance sector in China. |
Hong Kong | HKMA | HKMA Revises Capital Adequacy Guidelines for Locally Incorporated Authorized Institutions | The Hong Kong Monetary Authority (HKMA) has released a revised version of the Supervisory Policy Manual (SPM) module CA-G-1, which provides an overview of the capital adequacy regime for locally incorporated authorized institutions (AIs). This consultation draft, intended to take effect on January 1, 2025, aligns closely with Basel III standards and includes detailed guidance on calculating capital adequacy ratios (CAR) and leverage ratios (LR) on both a solo and consolidated basis. The revisions emphasize the importance of maintaining robust capital buffers, incorporating risk-weighting frameworks, and ensuring compliance with minimum capital requirements. The HKMA also highlights the need for AIs to integrate comprehensive internal capital adequacy assessment processes (CAAP) and adjust their capital structures to absorb losses in stress scenarios. This updated module aims to strengthen the resilience of Hong Kong’s banking sector by ensuring that AIs are well-capitalized and capable of withstanding financial and economic shocks. | |
Ireland | GOV.IE | Public Consultation on Capital Requirements Regulation III Implementation | The Department of Finance of Ireland has initiated a public consultation on the implementation of the Capital Requirements Regulation III (CRR III), effective August 20, 2024. This regulation, part of the broader EU Banking Package, amends the existing Capital Requirements Regulation and aligns with international standards set by the Basel Committee on Banking Supervision. The consultation seeks feedback on national discretions available under CRR III, such as calculating the un-floored total risk exposure amount and applying lower risk weights to certain mortgage exposures. Stakeholders are invited to submit their responses by September 17, 2024. The consultation outcomes will influence how Ireland incorporates these provisions into national law, shaping the regulatory landscape for Irish financial institutions. | |
New Zealand | RBNZ | Consultations on Crisis Management and Non-Core Standards for Deposit Takers | The Reserve Bank of New Zealand (RBNZ) released two key consultation papers aimed at enhancing the stability and resilience of the financial sector. The first paper focuses on crisis management under the Deposit Takers Act 2023, outlining significant changes in how the RBNZ will handle the distress and potential failure of deposit takers. It introduces new statutory powers and resolution tools, including the possibility of bail-ins, and seeks public feedback on the proposed framework by November 22, 2024. The second paper proposes non-core standards under the same Act, addressing areas such as governance, risk management, and operational resilience for banks and non-bank deposit takers. Both consultations reflect RBNZ’s commitment to strengthening the safety and soundness of New Zealand’s financial system. | |
Singapore | MAS | The Monetary Authority of Singapore (MAS) has released an updated version of its Compliance Toolkit for Merchant Banks, last revised on August 22, 2024. This toolkit provides comprehensive guidance on the approvals, notifications, and regulatory submissions that merchant banks must adhere to when dealing with MAS. Covering key legislative and regulatory requirements, the toolkit is designed to help merchant banks navigate the complex regulatory landscape, ensuring compliance with the Banking Act, MAS Act, Financial Services and Markets Act, and other relevant regulations. The latest revision emphasizes the importance of staying updated with MAS guidelines and introduces new procedures for reporting and risk management practices. Merchant banks are encouraged to familiarize themselves with the updated toolkit to ensure they meet all regulatory obligations effectively. | ||
Banks, Insurers | Australia | APRA | Prudential Standard CPS 001 on Defined Terms for Regulated Entities | The Australian Prudential Regulation Authority (APRA) has issued an updated Prudential Standard CPS 001, which consolidates and standardizes the defined terms used across the prudential framework for all APRA-regulated entities, including banks, insurance companies, and private health insurers. This revision, effective from October 1, 2024, revokes previous definitions under multiple prudential standards and aligns terminology across various sectors, ensuring consistency and clarity in regulatory language. The update is crucial for entities to accurately interpret and comply with APRA’s prudential requirements, enhancing the overall coherence of Australia’s financial regulatory framework. |
Insurance | European Union | European Union | Council Progresses Insurance Recovery and Resolution Directive (IRRD) | The Council of the European Union issued an update on the progress of the Insurance Recovery and Resolution Directive (IRRD), which aims to establish a comprehensive framework for the recovery and resolution of insurance and reinsurance undertakings across the EU. The directive, currently under discussion, seeks to enhance the stability and resilience of the insurance sector by introducing measures that ensure effective management of financial distress situations. The update includes a summary of working papers distributed between January and June 2022, reflecting the ongoing negotiations and the responses from member states. This directive is part of the EU’s broader efforts to harmonize financial regulations and safeguard the integrity of the insurance market. |
Switzerland | FINMA | FINMA Recognizes New Minimum Standards for Insurance Intermediaries’ Training and Education | The Swiss Financial Market Supervisory Authority (FINMA) announced the recognition of new self-regulation standards for the training and further education of insurance intermediaries. These standards, developed by the Insurance Industry Vocational Training Association (VBV), have been recognized as the minimum requirements under the revised Insurance Supervision Act and Ordinance, which took effect on January 1, 2024. Aimed at enhancing consumer protection, the standards require all insurance intermediaries, both tied and untied, to pass a professional examination and engage in regular continuing education. The standards will be enforced starting October 1, 2024, with audits beginning in August 2025 to ensure compliance. FINMA will oversee the implementation and act if the statutory objectives of consumer protection are at risk. | |
Investment | United States | SEC | SEC Adjusts Dollar Threshold for Qualifying Venture Capital Funds | On August 21, 2024, the U.S. Securities and Exchange Commission (SEC) adopted a final rule adjusting the dollar threshold defining a “qualifying venture capital fund” under the Investment Company Act of 1940. This adjustment, mandated by the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, raises the threshold from $10 million to $12 million, accounting for inflation. The rule also establishes a process for the SEC to make future inflation adjustments every five years, using the Personal Consumption Expenditures Chain-Type Price Index. This change aims to preserve the regulatory framework’s relevance as economic conditions evolve, ensuring that venture capital funds remain appropriately classified and regulated. |
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