Regulatory Changes, Financial Markets – Week 14

Regulatory Changes, Financial Markets

The financial regulatory landscape is undergoing a period of rapid transformation. A growing body of complex regulations, coupled with diverse policy perspectives across jurisdictions, creates significant compliance hurdles for institutions. To navigate these ever-shifting tides, staying informed is critical.

Our expertly curated digest delivers key regulatory updates, empowering you to stay compliant and confident in the face of evolving requirements.


The State Council (The People’s Republic of China)

China recently announced new ownership rules aimed at facilitating the trading and circulation of data domestically while also optimizing regulations concerning overseas data flow, as part of a broader strategy to balance development and security. At the national data work conference in Beijing, it was emphasized that the National Data Bureau, established to safeguard data security and boost the digital economy, will prioritize building a robust data infrastructure, including a property rights system to accelerate data flow and transactions, alongside rules for fair distribution of benefits from data mining. Officials highlighted the potential of digitalization in driving progress across various sectors and pledged increased government investment to enhance computing power and data circulation infrastructure while emphasizing the importance of data security. Moreover, China intends to bolster global cooperation in the digital economy and streamline rules for cross-border data flow.

MAS (Monetary Authority of Singapore)

MAS has released a paper which details the Monetary Authority of Singapore’s (MAS) consideration and incorporation of feedback on proposed amendments to the Payment Services Regulations 2019, specifically aimed at implementing key segregation and custody requirements for digital payment token (DPT) services under the Payment Services Act 2019. After a consultation period that closed on 3 August 2023, MAS finalized amendments to address concerns raised by respondents, covering aspects such as the scope of customers’ money subject to safeguarding requirements, the use of “trust accounts” for depositing customers’ assets, and the ability of DPT service providers to deposit their own assets in trust accounts for operational purposes. The document also outlines a transitional period provided by MAS before the enforcement of the amendments, highlighting MAS’s expectations for DPT service providers’ implementation efforts. This includes a comprehensive analysis of regulatory risks, with additional guidelines published to address consumer protection risks associated with digital payment token services.

IRDAI (Insurance Regulatory and Development Authority of India)

IRDAI (Registration, Capital Structure, Transfer of Shares, and Amalgamation) Regulations, 2024

Insurance Regulatory and Development Authority of India’s (IRDAI) latest regulatory framework “IRDAI (Registration, Capital Structure, Transfer of Shares, and Amalgamation) Regulations, 2024” came into effect on March 22, 2024. It introduces comprehensive rules governing the registration, capital structure, transfer of shares, and amalgamation procedures for Indian insurance companies. Aimed at simplifying the processes related to insurance companies’ operations in the market, enhancing the growth of the insurance sector, and easing the way of doing business, these regulations emphasize the importance of structured financial and operational management within the sector. This initiative is expected to streamline the regulatory framework for insurance companies in India, thereby facilitating better governance and operational efficiency across the industry.

IRDAI (Insurance Products) Regulations, 2024

IRDAI (Insurance Products) Regulations, 2024 issued by the Insurance Regulatory and Development Authority of India (IRDAI), effective from March 22, 2024, outlines the newly established guidelines for the development, pricing, and modification of insurance products. It aims to enhance the innovation and design of insurance offerings to better meet emerging market needs, ensure good governance practices in product development and pricing, and prioritize policyholder interests. These regulations mandate insurance companies to adopt comprehensive and agile management practices for insurance products, ensuring effective regulatory oversight and consumer protection. This initiative is part of IRDAI’s efforts to streamline insurance product management, encouraging transparency, efficiency, and accountability within the industry, thereby promoting the overall welfare of policyholders and stabilizing the insurance market.


NIST (National Institute of Standards and Technology), UK

The National Institute of Standards and Technology (NIST) has released the initial public draft of Special Publication (SP) 800-61r3 (Revision 3), focusing on Incident Response Recommendations and Considerations for Cybersecurity Risk Management within the framework of CSF 2.0. This draft emphasizes the critical role of incident response in cybersecurity risk management and underscores its integration throughout organizational operations. By aligning with the six Functions of the NIST Cybersecurity Framework (CSF) 2.0, organizations can better prepare for, mitigate, and recover from cybersecurity incidents, ultimately enhancing their overall resilience. The document aims to provide guidance for organizations to incorporate incident response practices effectively, thus reducing the frequency and impact of incidents while improving the efficiency of incident detection, response, and recovery. The public comment period is open until May 20, 2024, inviting feedback to refine and enhance the recommendations provided. Additionally, NIST encourages utilizing online resources available on their Incident Response project page to access supplementary information for implementing these recommendations effectively.

GFSC (Guernsey Financial Services Commission)

The Guernsey Financial Services Commission has issued a feedback paper following the consultation on disclosure rules for insurance intermediaries issued in 2023. The proposed changes, aimed at licensed insurance intermediaries and their clients, require disclosure of relationships with insurers and remuneration basis. These changes aim to enhance client protection and ensure compliance with IAIS Insurance Core Principles. The consultation period, which ran for seven weeks until January 29, 2024, received feedback mainly from licensees, with all six responses considered in the feedback process. The proposals focused on increasing transparency for clients, including disclosing intermediary-insurer relationships, representation status, insurer options, and remuneration basis. Prior engagement with industry stakeholders informed the consultation content. Amendments will take effect on January 1, 2025, aligning with IAIS Insurance Core Principles to enhance client protection and compliance with international standards.

FSA (Financial Service Authority), Isle of Man

The Isle of Man Financial Services Authority has issued a Consultation Paper seeking feedback on proposed amendments to several insurance regulations, including those related to valuation, solvency, and fees. The proposed changes aim to update methodologies in line with international standards, address taxation impacts, and resolve minor operational issues. The consultation targets existing Isle of Man authorized insurers, applicants for authorization, and registered insurance managers, with the objective of enhancing regulatory effectiveness, complying with international standards, and supporting the competitiveness of the Isle of Man’s financial services industry. The consultation process emphasizes open dialogue with stakeholders to ensure informed decision-making, with responses due by May 17, 2024.

BOE (Bank of England), UK

Financial Conduct Authority (FCA) and the Bank of England have jointly released a consultation paper to establish and manage the Digital Securities Sandbox (DSS)., aiming to facilitate innovation and enhance financial system efficiency. The paper outlines the regulatory approach to implementing and operating the DSS, the application process, rule-making powers, and the management of financial stability and market integrity risks. It follows His Majesty’s Treasury’s (HMT’s) confirmation of the DSS scope, allowing for the use of developing technology like distributed ledger technology (DLT) in financial market infrastructure (FMI) activities. HMT created a new category of firm, Digital Securities Depository (DSD), within the DSS framework, supervised jointly by the BoE and the FCA. This paper is relevant for firms intending to apply to the DSS, engage with sandbox entrants, or offer services for digital securities within the DSS. While participation in the DSS is voluntary, firms opting for FMI activities under the modified framework need approval as sandbox entrants. The consultation seeks input from prospective providers of financial market infrastructure and other stakeholders, with responses due by 29th May 2024, paving the way for the DSS’s launch in summer 2024 following a review and formal response process.

ESMA (European Securities and Markets Authority)

ESMA has issued a consultation paper inviting comments on proposed revisions to Commission Delegated Regulation (EU) 447/2012 and Annex I of the CRA Regulation, following a formal request for Technical Advice from the European Commission in June 2023. The request aimed to integrate Environmental, Social, and Governance (ESG) factors systematically into credit ratings and enhance transparency in including ESG risks by credit rating agencies. The consultation paper outlines ESMA’s proposals for amending the Delegated Act and Annex I of the CRA Regulation to explicitly integrate ESG factors, along with complementary amendments. ESMA seeks feedback on its proposals by 21 June 2024, with the aim to submit its technical advice to the European Commission by the end of December 2024. Interested stakeholders, including Credit Rating Agencies, firms considering registration, public institutions, users of credit ratings, issuers, investors, and industry bodies, are encouraged to participate in the consultation process.

Downloads Alert