Staying current with global regulatory updates is crucial for maintaining compliance and managing risk in the ever-evolving financial markets. Each week, new regulations and amendments are introduced that can significantly impact financial institutions’ operations, governance, and compliance requirements. By understanding these changes, financial entities can better prepare for shifts in regulatory landscapes, enhance their risk management strategies, and ensure they remain compliant with international standards. In the week 30 roundup, we delve into the latest regulatory updates from around the globe, uncovering how these shifts could reshape the financial world.
Business Line | Country | Regulator | Regulation/ Update | Summary |
All | Australia | Treasury | The Australian Government has initiated a public consultation on the proposed amendments to the Payment Times Reporting Rules 2024, following the recent implementation of the Payment Times Reporting (Amendment) Bill 2024, which received Royal Assent on 9 July 2024. These amendments, announced in the 2023–24 Mid-Year Economic and Fiscal Outlook, align with the Government’s response to the Statutory Review of the Payment Times Reporting Act 2020. The new rules include technical aspects such as reporting content and calculation methodologies aimed at enhancing the transparency and efficiency of payment practices to small businesses. Stakeholders are invited to submit their responses electronically or by post until 19 August 2024, with electronic submissions preferred in Word or RTF format for accessibility. All submissions will be published on the Treasury website unless confidentiality is specifically requested and justified. | |
Belgium | FSMA | The European Banking Authority (EBA) has released updated guidelines amending the ML/TF Risk Factors Guidelines (EBA/GL/2021/02) to address the evolving risks associated with crypto-asset service providers (CASPs). These changes align with the recent amendments to the European Union’s AML/CFT legislation and the introduction of Regulation (EU) 2023/1113. The updated guidelines provide comprehensive risk assessment criteria and customer due diligence (CDD) measures specific to CASPs, including guidance on managing risks related to self-hosted addresses, decentralised platforms, and anonymity-enhancing features. Additionally, sector-specific guidance for CASPs has been introduced to help manage these risks effectively. The amendments will take effect on 30 December 2024, and competent authorities must report their compliance status within two months of the official translations’ publication. | ||
European Union | EBA | On July 26, 2024, the three European Supervisory Authorities (EBA, EIOPA, and ESMA) released their joint final report on the draft Regulatory Technical Standards (RTS) for subcontracting ICT services under the Digital Operational Resilience Act (DORA). These RTS establish clear guidelines for financial entities to assess and manage the risks associated with subcontracting ICT services that support critical or important functions. The standards require comprehensive risk assessments during the pre-contractual phase and ongoing monitoring of subcontractors, ensuring that financial entities remain accountable for managing ICT risks. The RTS aim to strengthen the digital operational resilience of the EU financial sector by setting stringent requirements for contractual arrangements with ICT third-party service providers, emphasizing the importance of due diligence, risk assessment, and continuous oversight of subcontractors. | ||
European Union | ECB | The European Central Bank (ECB) initiated a public consultation on its draft Guide on governance and risk culture, which seeks to replace the 2016 supervisory statement. The new Guide outlines supervisory expectations and provides good practices for banks’ internal governance. Key focus areas include the composition and functioning of management bodies, roles and responsibilities of internal control functions, and the importance of robust risk culture and risk appetite frameworks. The ECB emphasizes the need for banks to continually enhance their governance standards to mitigate risks to capital and operational resilience. This consultation ends on October 16, 2024, with a stakeholder meeting scheduled for September 26, 2024, to discuss the Guide with experts from supervised institutions and other interested parties. | ||
Switzerland | FINMA | FINMA released Guidance 06/2024 addressing the risks and challenges associated with stablecoins for issuers and banks providing guarantees. This guidance highlights the legal classification of stablecoins, emphasizing their categorization under banking law or collective investment schemes, and outlines the implications under anti-money laundering (AML) regulations. FINMA underscores the necessity for stablecoin issuers to comply with AML requirements, including the verification of stablecoin holders’ identities. The guidance also details the requirements and potential reputational risks for banks providing default guarantees for stablecoins, stressing the importance of adhering to regulatory standards to avoid unauthorized activities and mitigate legal and reputational risks. The Swiss Federal Council has recognized the need for action, suggesting a review of exceptions under the Banking Ordinance to ensure continued protection for depositors and the financial system. | ||
Banking | Australia | APRA | Reforms to Enhance Banks’ Liquidity and Capital Requirements | The Australian Prudential Regulation Authority (APRA) announced the finalization of targeted reforms to strengthen banks’ liquidity and capital requirements. These changes, prompted by the 2023 banking crises in the United States and Europe, were refined through extensive consultation, including 35 submissions and additional workshops with industry stakeholders. Effective from July 1, 2025, banks under the Minimum Liquidity Holdings (MLH) regime must regularly adjust liquid asset values according to market prices, and all banks must be prepared to provide key financial information when seeking exceptional liquidity assistance (ELA) from the Reserve Bank of Australia. However, the proposal to phase out bank debt securities as liquid assets for MLH banks will be reviewed more comprehensively in APRA’s planned liquidity risk review next year. In the interim, APRA urges MLH banks to diversify their liquidity portfolios as per Prudential Standard APS 210. These measures aim to bolster the financial resilience of Australian banks against potential liquidity shortfalls, ensuring continued service provision to communities nationwide. |
European Union | ECB | Final Report on EBA Guidelines Amending Joint Committee Guidelines on Complaints Handling | The European Banking Authority (EBA), alongside the European Securities and Markets Authority (ESMA), published their final report on the amended guidelines for complaints handling in the securities and banking sectors on 24 July 2024. These amendments extend the Joint Committee Guidelines, initially implemented in 2014 and updated in 2018, to include credit servicers under Directive (EU) 2021/2167. The updated guidelines aim to ensure that credit servicers establish and maintain effective and transparent procedures for handling complaints from borrowers, thereby fostering consistency across the financial sectors and enhancing consumer protection. The guidelines include provisions for a complaints management policy, internal follow-up, and reporting requirements, aligning credit servicers’ practices with those already in place for other financial institutions. The guidelines are set to be applicable three months after the entry into force of the proposed Payment Services Regulation, expected in 2025. | |
European Union | European Commission | European Commission Delays Market Risk Requirements Implementation | The European Commission adopted a delegated regulation amending Regulation (EU) No 575/2013 to postpone the implementation of the new market risk requirements under the Fundamental Review of the Trading Book (FRTB) by one year, now set to commence on January 1, 2026. This decision aims to maintain a level playing field internationally, as significant jurisdictions, notably the United States, have not yet adopted the FRTB standards. During the postponement, banks will continue using pre-FRTB calculation methods for own funds requirements and related reporting and disclosure. This amendment ensures consistency in regulatory requirements and provides banks additional time to adapt to the new standards. | |
Hong Kong | HKMA | The Hong Kong Monetary Authority (HKMA) issued a consultation letter to the banking industry regarding proposed revisions to the Supervisory Policy Manual (SPM) module CA-B-3 and the Return MA(BS)25. These revisions aim to enhance the geographic allocation of private sector credit exposures for the Countercyclical Capital Buffer (CCyB) and improve quarterly reporting processes. The updates reflect recent changes in global financial regulations and aim to ensure more accurate risk assessments and capital adequacy calculations. Stakeholders are invited to submit their feedback to HKMA by the specified deadline to contribute to the finalization of these important regulatory changes. | ||
Insurance | Isle of Man | GOV.IM | Insurance (Non Long-Term Business Valuation and Solvency) Regulations 2021 | The Isle of Man Financial Services Authority has introduced the Insurance (Non Long-Term Business Valuation and Solvency) Regulations 2021, which came into effect on 30 June 2022. These regulations, developed under the Insurance Act 2008, establish comprehensive guidelines for the valuation and solvency of non-long-term insurance businesses. They include detailed provisions on capital requirements, valuation of assets and liabilities, technical provisions, and the solvency capital requirement (SCR). Specific measures address the operational risk, market risk, and counterparty default risk, ensuring that insurance companies maintain sufficient capital to cover potential losses. The regulations also stipulate requirements for data quality, the use of expert judgment, and the application of the principle of proportionality, thereby enhancing the overall financial resilience and regulatory compliance of the insurance sector. |
United Kingdom | BOE | the Prudential Regulation Authority (PRA) published its final policy statement (PS13/24) on funded reinsurance arrangements, following the consultation paper CP24/23. The final policy, encapsulated in Supervisory Statement (SS) 5/24, addresses risk management, solvency capital requirements (SCR), and structuring of funded reinsurance agreements for UK Solvency II firms and insurance and reinsurance undertakings with UK branches. The policy aims to enhance firms’ resilience to potential risks associated with funded reinsurance, focusing on investment limits, collateral policies, and the management of recapture events. Despite calls for implementation delays, the PRA has decided to enforce the policy immediately, emphasizing the growing use of funded reinsurance and the need for robust supervision. Firms are expected to establish comprehensive risk management frameworks, including internal investment limits, collateral policies, and recapture plans to ensure compliance and mitigate risks effectively. | ||
Investment | Australia | ASIC | New financial reporting and audit obligations for superannuation funds commence | As of 1 July 2023, the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 has extended the financial reporting and auditing obligations under Chapter 2M of the Corporations Act 2001 to most registrable superannuation entities. Superannuation trustees must now lodge audited financial reports for their funds with the Australian Securities and Investments Commission (ASIC) within three months of the fund’s financial year-end, with the first deadline on 30 September 2024. This requirement is intended to promote greater transparency and accountability, ensuring high-quality financial reporting that includes financial statements, notes, directors’ declarations, auditor’s reports, and directors’ reports with remuneration disclosures. The financial reports must be submitted via ASIC’s Regulatory Portal, where they will be publicly available. This measure aims to build public trust and confidence in the integrity of the financial system by ensuring that superannuation trustees maintain rigorous governance and control over financial reporting processes. |
Australia | Treasury | The Australian Treasury has released the exposure draft of the Treasury Laws Amendment Bill 2024: Acquisitions, as part of its effort to reform merger rules and processes. This new legislation aims to create a faster, stronger, and simpler system to better target anti-competitive transactions, thereby improving consumer and business outcomes. The reforms were first announced on April 10, 2024, and have been informed by a consultation period that ran from November 2023 to January 2024. The current consultation, open until August 13, 2024, seeks feedback on the framework, including notification timelines, definitions, competition impact assessments, and procedural safeguards. The Competition Review Taskforce will engage with stakeholders through targeted consultations and will consider further details on notification thresholds, fees, and the ACCC’s public register later this year. Interested parties can submit their responses electronically or by post, with all submissions made public unless confidentiality is specifically requested. | ||
European Union | European Union | The European Central Bank (ECB) has introduced Regulation (EU) 2024/1988, amending its previous guidelines on investment fund (IF) statistics, effective from December 1, 2025. This regulation enhances the scope and frequency of data collection on the assets, liabilities, and income of IFs, incorporating more detailed monthly statistical requirements. It aims to provide a comprehensive view of the IF sector across the euro area, essential for monetary policy and financial stability analysis. The regulation covers all types of IFs, including UCITS and AIFs, and mandates the collection of security-by-security information and detailed fund characteristics. This update reflects the ECB’s commitment to improving data quality and availability, ensuring robust financial oversight and policy formulation. | ||
Ireland | CBI | Feedback Statement on Macroprudential Policy for Investment Funds | The Central Bank of Ireland published a Feedback Statement on its Discussion Paper regarding a macroprudential policy framework for investment funds. This publication highlights key considerations and stakeholder responses, reflecting the growing importance of the global funds sector in economic financing and the broader financial system. The statement outlines the Central Bank’s focus on enhancing the resilience of the funds sector against financial shocks, informed by extensive stakeholder engagement and an international conference held in May. Deputy Governor Vasileios Madouros emphasized the necessity of adapting the regulatory framework to ensure the robustness of this financing form. The Central Bank plans to align with international efforts led by the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) to bolster the resilience of non-bank financial institutions. Domestically, the focus will be on implementing existing macroprudential measures and monitoring evolving financial vulnerabilities | |
Singapore | MAS | Consultation on Proposed Amendments to Leverage Requirements for REITs | The Monetary Authority of Singapore (MAS) released a consultation paper on July 24, 2024, proposing amendments to the leverage requirements for Real Estate Investment Trusts (REITs). The key proposals include setting a minimum interest coverage ratio (ICR) threshold of 1.5 times for all REITs and establishing a single aggregate leverage limit of 50%. These changes aim to simplify the current framework, which previously required an ICR of 2.5 times only when a REIT’s leverage exceeded 45%. Additionally, MAS proposes that REITs perform and disclose sensitivity analyses on the impact of changes in EBITDA and interest rates in their financial reports. This initiative seeks to enhance transparency and ensure REITs maintain prudent borrowing practices. Stakeholders are invited to submit their feedback by August 23, 2024, to help shape the final amendments. | |
United Kingdom | FCA | The Financial Conduct Authority (FCA) published Policy Statement PS24/9, finalizing rules to introduce payment optionality for investment research. This follows Consultation Paper CP24/7 and aims to provide asset managers with additional flexibility in how they pay for investment research. The new rules allow for joint payments for third-party research and execution services, alongside existing options where firms pay from their own resources or through a research payment account (RPA). The policy includes robust guardrails to ensure consumer protection, transparency, and fair allocation of costs. The changes are designed to enhance competition, market integrity, and international competitiveness of the UK’s financial services. These rules will come into force on August 1, 2024, and firms are required to update their internal procedures accordingly. | ||
United Kingdom | FCA | The Financial Conduct Authority (FCA) unveiled a comprehensive package of measures aimed at bolstering the UK’s capital markets and reinforcing its position as a leading global financial centre. Central to these measures are the proposed rule for a new Public Offers and Admissions to Trading Regime (POATRs), which will replace the existing UK Prospectus Regulation. Under the new regime, companies will still need to publish a prospectus when first admitting securities to public markets but will not require one for subsequent capital raises, except in limited circumstances. Additionally, the FCA is consulting on the introduction of public offer platforms to facilitate capital raising for smaller companies. The FCA also confirmed new rules allowing asset managers more flexibility in paying for investment research, promoting competition and aligning with international standards. The final part of the package includes proposals for derivatives trading obligations to enhance secondary market regulation and reduce systemic risk. Stakeholders are invited to participate in consultations to ensure balanced and effective regulatory outcomes. | ||
United Kingdom | FCA | Consultation on the derivatives trading obligation and post-trade risk reduction services | The Financial Conduct Authority (FCA) published Consultation Paper CP24/14, seeking feedback on proposed amendments to the derivatives trading obligation (DTO) and post-trade risk reduction services. The consultation aims to align UK regulations with global standards, including bringing certain SOFR-based overnight index swaps under the DTO to improve market transparency and liquidity. Additionally, the FCA proposes expanding exemptions for post-trade risk reduction services, such as portfolio compression and rebalancing, from the DTO and other regulatory obligations. These changes are intended to enhance market stability and reduce systemic risk. Stakeholders are invited to submit their comments by 30 September 2024, with the final rules expected to be published in the fourth quarter of 2024. | |
United States | Federal Register | On July 24, 2024, the Internal Revenue Service (IRS) released a notice of proposed rulemaking regarding the identification of certain partnership related-party basis adjustment transactions as transactions of interest, correcting a previous notice from June 18, 2024. These proposed regulations, found under docket number REG-124593-23, aim to classify specific basis adjustment transactions between related parties in partnerships as reportable transactions, thereby enhancing transparency and compliance. The IRS invites stakeholders to submit comments by August 19, 2024, via the Federal eRulemaking Portal. The proposal underscores the IRS’s commitment to scrutinizing complex partnership arrangements that could potentially be used to evade taxes, ensuring robust reporting and monitoring mechanisms are in place to safeguard the tax system. |
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