Regulatory Changes, Financial Markets – Week 19

Regulatory Changes, Financial Markets

Regulatory changes are constantly evolving across the global financial landscape, as authorities worldwide introduce major updates and consultations. These developments aim to strengthen financial regulations, ensuring effectiveness, fostering compliance, and promoting transparency.

Our blog offers an in-depth analysis of these regulatory shifts, equipping organizations with actionable insights. This empowers them to navigate the ever-changing regulatory environment adeptly, achieve full compliance, and maintain robust operational resilience.

Business line



Rule/ Regulation



United Kingdom


Consultation series on generative AI and data protection

The Information Commissioner’s Office (ICO) has initiated a consultation series on the intersection of data protection law and generative AI technology, which creates new content such as text, audio, and images. This consultation aims to address the legal implications of developing and using generative AI models responsibly, considering aspects like lawful basis, purpose limitation, accuracy, and data subject rights. The ICO seeks input from various stakeholders including developers, legal advisors, and civil society groups to inform their guidance on generative AI. The series comprises chapters focusing on different aspects of the issue, such as the lawful basis for web scraping, purpose limitation, accuracy of training data, and engineering individual rights into AI models. The consultation period for each chapter varies, with the final chapter closing on June 10, 2024.



Digital Asset Business Single Currency Pegged Stablecoins (SCPS) Guidance

The Bermuda Monetary Authority (BMA) has released guidance on Single Currency Pegged Stablecoins (SCPS) under the Digital Asset Business Act 2018 (DABA), aiming to ensure prudent conduct within the digital asset industry. SCPS are defined as digital assets maintaining stable value relative to a specified fiat currency, offering stability compared to unbacked digital assets. The BMA acknowledges the potential of SCPS for widespread payment use and financial innovation. The guidance emphasizes a principles-based approach, expecting digital asset businesses (DABs) to assess and mitigate risks proportionate to their nature, scale, complexity, and risk profile. While focusing primarily on SCPS, the BMA remains open to evolving use cases and business models, retaining the authority to impose additional requirements to safeguard financial stability and consumer protection.

United States

Federal Register

Reporting, Procedures and Penalties Regulations

The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury has issued an interim final rule, accompanied by a request for comments, to amend the Reporting, Procedures and Penalties Regulations. This rule mandates electronic filing for certain submissions to OFAC and modifies reporting requirements concerning blocked property and rejected transactions. It necessitates the use of the electronic OFAC Reporting System for reports on blocked property and rejected transactions, removes the mail option for certain submissions, and clarifies reporting requirements for blocked property that is unblocked or transferred. Additionally, OFAC is updating procedures for requests regarding property blocked in error and clarifying information availability under the Freedom of Information Act (FOIA). The rule also outlines the process for seeking removal of a person or property from OFAC lists and describes reports that financial institutions may need to provide concerning transactions meeting specific criteria. The rule is soliciting public comments for 30 days and will be effective from August 8, 2024.

European Union

European union

P9_TA(2023)0387 – European single access point (ESAP)

The European Parliament has approved Regulation (EU) 2023/2859, establishing the European single access point (ESAP), which offers centralized access to publicly available information concerning financial services, capital markets, and sustainability. This regulation aims to enhance transparency and accessibility by providing a one-stop platform for relevant data. The decision follows thorough consideration, including input from the Commission, the European Central Bank, and the European Economic and Social Committee. The Parliament emphasizes its readiness to revisit the matter should significant amendments occur and instructs its President to communicate its stance to the Council, the Commission, and national parliaments.

European Union

European union

P9_TA(2023)0385 – Data Act

The European Parliament has ratified Regulation (EU) 2023/2854, known as the Data Act, which establishes harmonized rules governing fair access to and utilization of data, thereby addressing concerns related to data access and usage within the European Union. This legislative decision follows careful consideration of the Commission’s proposal and consultations with various stakeholders, including the European Central Bank, the European Economic and Social Committee, and the Committee of the Regions. Parliament’s position, adopted at first reading, signifies a comprehensive approach to data governance, aiming to ensure fairness and transparency while fostering innovation and competition. The Parliament underscores its readiness to revisit the matter should significant amendments arise, and tasks its President with communicating its stance to the Council, the Commission, and national parliaments.

European Union

European union

New Directive (EU) 2024/1306 Amends Sustainability Reporting Standards

Directive (EU) 2024/1306, adopted on 29 April 2024, introduces crucial amendments to Directive 2013/34/EU concerning sustainability reporting standards. The directive recognizes the pivotal role of sustainability reporting in ensuring market transparency and accountability while aiming to streamline requirements and reduce administrative burdens. Notably, the deadline for adopting sustainability reporting standards is extended by two years, allowing undertakings to prioritize the implementation of existing regulations first. Emphasizing the importance of sector-specific reporting standards, particularly for sectors with high sustainability risks, the directive aims to enhance comparability and usefulness of sustainability information. Furthermore, the deadline for adopting reporting standards for certain third-country undertakings is also extended. To foster democratic control and transparency, the Commission is mandated to consult the European Parliament and relevant expert groups annually on the development of sustainability reporting standards. These amendments are set to take effect upon publication in the Official Journal of the European Union, signifying a significant step towards harmonizing sustainability reporting practices across sectors and jurisdictions.

European Union


Final draft technical standards under MiCAR

The European Banking Authority (EBA) has released final draft regulatory and implementing technical standards concerning the Markets in Crypto-Assets Regulation (MiCAR), focusing on the authorization of asset-referenced tokens (ARTs) issuers, acquisition of qualifying holdings in ART issuers, and approval procedure for ART white papers issued by credit institutions. The standards outline information requirements for ART authorization applications, emphasizing that only EU-established legal entities may apply, while clarifying that authorization pertains solely to public offering or trading admission, not issuance. Additionally, standards for assessing the completeness of authorization applications and detailed content for notification of proposed acquisitions of qualifying holdings are established. Notably, considerations for privacy compliance have been integrated into the standards following public consultation. While credit institutions do not require authorization to issue ARTs, they must notify competent authorities, with white papers subject to approval. The procedure for white paper approval for ARTs issued by credit institutions delineates timeframes for institutions, competent authorities, and central banks. These standards, developed in collaboration with European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), align with MiCAR and aim to ensure effective regulation and supervision of crypto-asset issuance and services within the EU, with ART-related provisions set to take effect from 30 June 2024.



Consultation on updated guidance for carbon market participants

ASIC has initiated a consultation on proposed updates to its Regulatory Guide 236, titled “Do I need an AFS licence to participate in carbon markets?” (RG 236), aiming to address recent safeguard mechanism reforms and changes in the regulatory landscape for carbon markets, particularly Australian Carbon Credit Units (ACCUs). The proposed updates tackle the implications of the safeguard mechanism reforms introduced under the Safeguard Mechanism (Crediting) Amendment Act 2023 and the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015, which commenced on 1 July 2023. Under these reforms, the Clean Energy Regulator (CER) may issue safeguard mechanism credits units (SMCs) to large industrial facilities, termed ‘safeguard facilities,’ from January 2025. ASIC also seeks feedback on proposed updates to several examples in RG 236, including those concerning derivatives over emissions units and financial product advice on SMCs and ACCUs, along with input on other common real-world scenarios in the carbon market. These updates align with ASIC’s commitment to ensuring comprehensive regulatory guidance and are expected to be published in the second half of 2024.


South Africa

Reserve Bank

Guidance on climate-related governance and risk practices for banks

In a comprehensive effort to integrate climate-related considerations into banking practices, the Prudential Authority has released detailed guidance for banks on managing climate-related governance and risk. This guidance note mandates that banks embed climate-related risks within their internal risk management frameworks and capital adequacy assessments. It emphasizes the need for effective board oversight, specialized risk management processes, and robust governance structures tailored to address both the physical and transitional risks associated with climate change. Banks are encouraged to develop strategic responses that include scenario analysis, stress testing, and incorporating climate-related risks into their overall business strategies and risk appetite. This initiative reflects a proactive approach to ensuring that banks not only understand the multifaceted nature of climate-related risks but also take decisive action to mitigate their potential impacts on financial stability.

South Africa

Reserve Bank

Guidance on climate-related disclosures for banks

The recently issued Guidance Note G3/2024 by the South African Reserve Bank provides detailed recommendations on climate-related disclosures for banks, aiming to enhance transparency and risk management related to climate impacts. This guidance stresses the integration of climate considerations into existing risk management and governance frameworks. It outlines the necessary actions for banks to disclose governance practices, strategic responses to climate risks and opportunities, and the impact of these factors on their business models. The document emphasizes the evolving nature of climate risk management, encouraging banks to adapt and update their approaches continually to address both physical and transition-related climate risks comprehensively.

Hong Kong


Supervisory Policy Manual (SPM) SB-1

The Hong Kong Monetary Authority (HKMA) has issued a revised version of the Supervisory Policy Manual (SPM) SB-1, titled “Supervision of regulated activities of SFC-registered authorized institutions,” effective from 10 May 2024. This updated module, serving as a statutory guideline under section 7(3) of the Banking Ordinance, aims to enhance accessibility to regulatory and guidance materials for registered institutions (RIs). Enriched with comprehensive insights into the regulatory framework, supervisory approach, and legal requirements, the revised module serves as a convenient regulatory handbook for practitioners, with references to source supervisory documents for detailed information. Notably, to accommodate increasing cross-boundary business activities, an arrangement allowing RIs to engage itinerant professionals for regulated activities has been established. Interested parties can access the SPM module online via the HKMA’s website, with further inquiries directed to specified contacts.



Financial Services Agency Announces Basel Committee’s Guidelines on Counterparty Credit Risk Management

On May 9th 2024, the Financial Services Agency (FSA) announced the publication of the Basel Committee on Banking Supervision’s consultation document titled “Guidelines for counterparty credit risk management”. Released on April 30th, this document replaces the “Sound practices for bank’s interactions with highly leveraged institutions” issued by the Basel Committee in January 1999 and proposes approaches to counterparty credit risk management for banks. Further details and the consultation document can be accessed through the provided links. Comments on this consultation document are invited to be submitted to the Basel Committee in English by August 28th, 2024.

United States


Amendment of the Reporting, Procedures and Penalties Regulations (RPPR)

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has issued an interim final rule amending its Reporting, Procedures, and Penalties Regulations. This update, set for publication in the Federal Register on May 10, 2024, mandates the electronic submission of reports related to blocked property and rejected transactions through the electronic OFAC Reporting System. It also revises various reporting requirements and modifies procedures for requests related to erroneously blocked property. The changes aim to enhance efficiency and accuracy in the management of blocked assets and compliance with sanctions regulations. OFAC seeks public comments on these revisions for a 30-day period post-publication.

United Kingdom


Mortgages and coronavirus: additional guidance for firms – finalised guidance

The Financial Conduct Authority (FCA) has issued finalised guidance concerning mortgages amidst the COVID-19 pandemic, particularly addressing support for borrowers who have benefited from payment deferrals and those facing financial difficulties beyond October 31, 2020. Effective from September 16, this guidance replaces previous iterations and emphasizes tailored assistance for affected borrowers. While the FCA’s existing guidance extends support until October 31, with the option for consumers to apply for a first or second 3-month payment deferral, ongoing uncertainties prompt the FCA to review and potentially update their stance as needed.

United Kingdom


PS20/01: Final Rules on Mortgage Advice and Selling Standards

The Financial Conduct Authority (FCA) has released Policy Statement 20/01 outlining final rules and guidance on mortgage advice and selling standards as part of the Mortgages Market Study. Addressing potential harms identified in the study, such as barriers to consumer choice and overpayment for mortgages, the FCA consulted on changes to improve the mortgage advice process. The final rules aim to facilitate easier presentation of options without regulated advice and enhance execution-only sales channels. These changes, along with recent adjustments to responsible lending rules, aim to provide consumers with suitable mortgage options. The new rules will be effective from January 31, 2020, with transitional provisions in place until July 30, 2020, to allow firms time to adjust their processes accordingly.

United States

New Hampshire | Banking Department

Joint guidance on third party risk management practices

Federal bank regulatory agencies, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, released a comprehensive guide for community banks on third-party risk management. This guide emphasizes the critical nature of managing risks associated with third-party relationships that community banks rely on to access technologies, human capital, and new markets. It outlines the full life cycle of third-party relationships from planning, due diligence, contract negotiation, ongoing monitoring, to termination. Additionally, the guide aligns with the Interagency Guidance on Third-Party Relationships: Risk Management issued in June 2023, providing community banks with a structured approach to ensure that third-party engagements are managed safely and comply with regulatory standards, despite the lack of direct operational control over these relationships.

European Union

European Union

ESRB Recommendation on Cross-Border Effects of Macroprudential Policy Measures

The European Systemic Risk Board (ESRB), under recommendation ESRB/2023/13 dated 8 December 2023, has revised its Recommendation ESRB/2015/2 to further enhance the framework of voluntary reciprocity for macroprudential policy measures across EU Member States. This amendment aims to ensure that exposure-based macroprudential measures activated in one Member State are reciprocated in other Member States to prevent regulatory arbitrage and negative cross-border effects. Key updates include setting a maximum materiality threshold for the reciprocation of such measures, with specific changes influenced by recent macroprudential developments in Portugal and Denmark, where sectoral systemic risk buffer (sSyRB) rates have been set at 4% and 7% respectively, targeting specific exposures in real estate sectors. These measures emphasize the ESRB’s ongoing commitment to reinforcing financial stability across the EU by ensuring that macroprudential risks are managed effectively and consistently.

European Union


SRB Extends Deadline for MBDT Public Consultation

The Single Resolution Board (SRB) has announced an extension of the deadline for the minimum bail-in data template (MBDT) public consultation to 15th May 2024. Originally launched on 13th March 2024, the consultation seeks feedback from stakeholders on the MBDT. This extension responds to industry requests and aims to encourage broader engagement, allowing interested parties additional time to contribute their comments. Stakeholders are encouraged to visit the consultation page for further information and to submit their feedback before the new deadline.

Banks, Insurers



DRAFT RULE to amend the Annex to ASF Rule No 13/2018

The regulatory update from the document outlines a proposed modification to the Financial Supervisory Authority’s standard concerning the application of ESMA’s (European Securities and Markets Authority) guidelines on stress test scenarios for money market funds under Article 28 of Regulation (EU) No 1131/2017. This amendment aims to update the annex of the norm published in the Official Monitor of Romania, ensuring that it aligns with current practices and standards for crisis simulation scenarios. The changes are designed to enhance the robustness and applicability of stress tests that money market funds or their managers are required to perform, establishing common parameters for these simulations and ensuring consistent application across relevant entities. This regulatory shift underscores the authority’s commitment to maintaining financial stability and reliability within the framework of European market regulations.


European Union


Call for advice on the review of specific items in the Solvency II Delegated Regulation

The European Commission has requested technical advice from the European Insurance and Occupational Pensions Authority (EIOPA) concerning updates to the Solvency II Delegated Regulation (EU) 2015/35. This request includes advice on methodologies for classifying firms as small and non-complex, conditions for supervisory approval for proportionality measures, capital requirements for exposures to central counterparties (CCP) when they become direct clearing members, and capital requirements for investments in crypto assets. EIOPA’s advice is expected by January 31, 2025, for the first two items, and by June 30, 2025, for the advice on crypto assets. This initiative aims to ensure that regulatory frameworks remain relevant and adequately cover new risks and market developments, thereby enhancing the robustness of financial oversight.

United Kingdom


Financial Services and Markets Act 2023 (Commencement No. 6) Regulations 2024

The “Financial Services and Markets Act 2023 (Commencement No. 6) Regulations 2024” details the ongoing implementation of the Financial Services and Markets Act 2023. Effective from 31st December 2024, this statutory instrument will initiate the revocation of various assimilated laws related to financial services and markets within the UK. The regulations impact laws derived from EU directives, particularly those concerning the insurance and reinsurance sector under Solvency II and adjust the UK’s legislative framework to better align with domestic priorities post-Brexit. This move includes the revocation of certain EU tertiary legislations, like Commission Delegated Regulation (EU) 2015/35 and other related implementing regulations, which were initially designed to harmonize the insurance market across Europe.


United Kingdom


Financial Services Consumer Panel response to FCA CP 24/4

The Financial Services Consumer Panel has submitted a detailed response to the FCA’s consultation paper CP 24/4, which discusses the regulatory framework for pensions dashboard service firms. The response, which builds on their previous comments from February 2023, emphasizes the importance of the pensions dashboard in enhancing consumer engagement with their pensions. The Panel highlights the necessity for the dashboard to provide accurate, fair, unbiased, and timely information, ensuring it aligns with the Consumer Duty. They also suggest that the FCA could use the dashboard as a tool to increase consumer awareness of its role in consumer protection. The Panel stresses the importance of consumer testing and the FCA’s active review of this process to ensure the dashboard meets regulatory standards and truly benefits users.

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