The financial industry stands at a critical juncture as regulatory bodies worldwide continue to refine and strengthen their oversight frameworks. These evolving regulations, spanning from crypto-assets to traditional banking, are set to reshape the operational landscape for financial institutions globally. As the industry grapples with new compliance requirements, enhanced consumer protection measures, and stricter capital standards, firms must remain agile and forward-thinking. These regulatory shifts not only aim to fortify the financial system against potential risks but also seek to foster innovation, fair competition, and sustainable practices in an increasingly complex and interconnected global economy.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | China | SAMR | The State Administration for Market Regulation (SAMR) in China released the “Key Measures of Market Supervision Departments to Optimize the Business Environment (2024 Edition).” This comprehensive policy outlines 40 key measures across 10 areas aimed at improving market supervision, promoting fair competition, and enhancing the internationalization of China’s business environment. The measures emphasize building a unified national market system, facilitating market access and exit, and reducing institutional transaction costs. Furthermore, the initiative seeks to eliminate local protectionism, rectify unfair market interventions, and promote the use of electronic business licenses to streamline operations. By addressing these key areas, China aims to bolster business confidence, protect the rights of small and medium enterprises, and attract foreign investment, contributing to its modernization and global economic participation. | |
European Union | EDPB | EDPB and European Commission Collaborate on GDPR and DMA Guidance | The European Data Protection Board (EDPB) and the European Commission agreed to collaborate on developing guidance to clarify the interplay between the General Data Protection Regulation (GDPR) and the Digital Markets Act (DMA). This partnership seeks to ensure the coherent application of regulatory obligations on digital gatekeepers under the DMA, which intersect with GDPR requirements. By fostering enhanced dialogue and cooperation, the two entities aim to harmonize interpretations of both regulatory frameworks while respecting each regulator’s competencies. This initiative builds on existing engagements within the DMA’s High Level Group, focusing on the implementation of data-related and interoperability obligations, thereby ensuring complementary objectives across the two legal frameworks. | |
Global | G20 | On September 12, 2024, Tawfic Jelassi, UNESCO’s Assistant Director-General for Communication, emphasized the organization’s commitment to fostering responsible artificial intelligence (AI) use during an interview at the G20 Digital Economy Working Group meeting. Jelassi highlighted UNESCO’s collaboration with global partners, particularly Brasil, in promoting information integrity through initiatives like “Internet for Trust,” aimed at combating disinformation and enhancing media literacy. UNESCO is also advancing ethical AI standards by supporting over 60 countries with the implementation of AI ethics frameworks, ensuring responsible practices. This aligns with their broader goal of promoting an inclusive digital transformation, including the inclusion of indigenous languages and accessibility for people with disabilities. UNESCO’s efforts continue to address global challenges such as disinformation, media freedom, and the ethical use of technology. | ||
Ireland | GOV.IE | Regulatory Impact Analysis on Consumer Credit Directive (CCD2) | The Department of Finance has prepared a Regulatory Impact Analysis (RIA) for the transposition of Directive (EU) 2023/2225, the Consumer Credit Directive (CCD2), which aims to enhance consumer protection across the EU credit market. This new directive addresses shortcomings in Directive 2008/48/EC, particularly concerning new credit products like buy-now-pay-later, the impact of digitalization on consumer credit, and inconsistencies across EU member states. The preferred option for Ireland is to transpose the directive, harmonizing lending rules, improving consumer protection, and fostering a level playing field for lenders. Enforcement will be regulated by the Central Bank of Ireland, and a public consultation will be launched to finalize transposition. | |
Italy | CONSOB | Consob issued Communication No. 1/24 to operators in the crypto-assets sector, urging them to prepare for the imminent implementation of the Markets in Crypto-Assets Regulation (MiCAR). This regulation, part of the EU’s Digital Finance Package, establishes transparency requirements for crypto-asset offerings and introduces an authorization regime for service providers. Consob emphasizes the need for operators to ensure transparency to clients about their MiCAR compliance plans and implementation measures. Operators are required to adopt internal controls and organizational safeguards to comply with the new obligations, including preventing market abuse and providing accurate information to clients. Consob also offers to engage in preliminary talks to assist operators in adhering to the new regulations. | ||
Italy | BancadItalia | Operational Guidelines for Issuers of Asset-Referenced and E-Money Tokens under MiCAR | The Italian Council of Ministers issued a decree to align the national regulatory framework with the Markets in Crypto-assets Regulation (MiCAR), effective since June 30, 2024. Consob and the Bank of Italy have been designated as the competent authorities responsible for overseeing the issuance and offering of asset-referenced tokens (ARTs) and e-money tokens (EMTs). These tokens, key components of Titles III and IV of MiCAR, must comply with rigorous transparency and authorization procedures, including the submission of a white paper detailing the token’s features, associated risks, and underlying technology. Entities intending to engage in issuing or trading ARTs or EMTs are encouraged to engage in preliminary dialogue with the authorities to ensure compliance and initiate formal notification or authorization processes well in advance. | |
Jersey | Jersey Legal Information Board | Amendments in Financial Services Disclosure and Information Law to Enhance AML Compliance | Jersey’s States Assembly adopted the Financial Services (Disclosure and Provision of Information) (Jersey) Amendment Law 202-, introducing critical updates aimed at enhancing anti-money laundering (AML) compliance. The amendments empower the Jersey Financial Services Commission (JFSC) to disclose beneficial ownership information to financial services businesses, aiding in fulfilling customer due diligence requirements under the Money Laundering (Jersey) Order 2008. The law outlines strict guidelines on the use and disclosure of beneficial ownership information, with violations resulting in penalties, including fines and imprisonment. These changes emphasize the importance of transparency and reinforce the regulatory framework to combat financial crime. | |
United Kingdom | BOE | Updated Underwriting Standards for Buy-to-Let Mortgage Contracts | The Prudential Regulation Authority (PRA) released an updated version of Supervisory Statement (SS) 13/16 in September 2024, detailing underwriting standards for buy-to-let mortgage contracts. The update revises the 2016 standards and introduces changes effective from January 1, 2026, in line with the Basel 3.1 standards. The SS applies to all PRA-regulated firms providing buy-to-let lending that is not already subject to Financial Conduct Authority (FCA) regulation. The key components include affordability testing based on the borrower’s rental income and personal income, with firms required to assess whether rental income can support mortgage payments through an interest coverage ratio (ICR) test. Personal income can be factored into affordability assessments where applicable. For portfolio landlords, defined as those with four or more mortgaged buy-to-let properties, the PRA requires a specialized underwriting approach due to the complexity of managing multiple properties. Risk management practices must also be robust, with limits on loan-to-value ratios, oversight of third-party intermediaries, and measures to mitigate fraud risks. | |
Banking | Global | UNEPFI | Effective Governance in Responsible Banking: Guidance for Banks | The Guidance on Effective Governance (2024) by the UN Environment Programme Finance Initiative (UNEP FI) focuses on fostering robust governance frameworks within the banking sector to meet sustainability goals, particularly under the Principles for Responsible Banking (PRB). Banks are encouraged to develop strong governance systems that promote accountability and business integrity, with an emphasis on aligning their operations with global frameworks like the Sustainable Development Goals (SDGs) and the Paris Agreement. The guidance outlines five key elements for banks to establish sustainability governance: responsible leadership, governance design, sustainability integration, purpose and knowledge, and stakeholder engagement. It is designed to assist banks in navigating the technical, commercial, and ethical complexities of sustainability while supporting their commitments to responsible banking. |
Global | UNEPFI | The recently published Guidance on Client Engagement by the UNEP Finance Initiative outlines best practices for banks in engaging clients under Principle 3 of the Principles for Responsible Banking (PRB). The guidance emphasizes that banks, as crucial economic intermediaries, should work responsibly with clients to promote sustainable business practices and support economic activities that foster shared prosperity for current and future generations. Client engagement is integral to a bank’s impact management, helping them assess risks and identify opportunities tied to sustainability goals. The document presents a structured approach to client engagement, with a focus on institutional clients but with adaptable practices for retail customers as well. By offering comprehensive strategies, including governance, data management, and portfolio impact analysis, banks can create long-term value for clients through tailored financial solutions, transitioning business models, and sustainable finance offerings. Ultimately, the guide positions client engagement as central to banks’ sustainability agendas, supporting both their business and societal goals. | ||
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, as empowered by Section 8(1)(e) of the Companies and Allied Matters Act (CAMA) No. 3 of 2020. The guidelines outline procedures for new incorporations, share capital increases, mergers, and license upgrades or downgrades. For new incorporations, companies must secure regulatory approval and satisfy incorporation requirements, with certificates issued within 24 hours. Increasing share capital requires company resolutions, regulatory approval, and the filing of amended documents, while merger procedures must include court-sanctioned resolutions and regulatory oversight from the Securities and Exchange Commission (SEC). The update emphasizes streamlined regulatory processes, ensuring faster approvals and compliance with statutory obligations for financial institutions in Nigeria. | |
South Africa | Reserve Bank | The South African Prudential Authority (PA) has issued a proposed directive for amendments to its banking regulations in line with the Basel III post-crisis reforms. These amendments, designed to strengthen the regulation and supervision of banks, will be implemented by July 2025. Key aspects include a more granular and risk-sensitive approach to credit risk, revisions to internal ratings-based approaches, and the introduction of a standardized framework for operational risk. Additionally, the reforms adjust the leverage ratio framework and implement a phased output floor to ensure a level playing field between banks using internal models and those applying standardized approaches. The PA invites comments on these proposed amendments, with feedback due by October 21, 2024. The amendments are aimed at enhancing the resilience of South Africa’s banking sector in alignment with international standards. | ||
United Kingdom | GOV.UK | UK Moves to Align Capital Requirements Regulation with FSMA 2000 Model | HM Treasury announced a policy update to apply the Financial Services and Markets Act (FSMA) 2000 model of regulation to the Capital Requirements Regulation (CRR). This transition aims to revoke parts of the CRR, originally incorporated from EU law post-Brexit, and replace them with rules set by the Prudential Regulation Authority (PRA) and the Bank of England. The revocation will be completed in three stages, starting with provisions necessary to implement the Basel 3.1 standards by 1 January 2026. The FSMA model empowers independent regulators to design rules, ensuring regulation remains adaptable to the UK’s specific needs while maintaining alignment with international standards. This update is expected to improve regulatory efficiency and foster competitiveness in the UK’s banking and financial services sectors. | |
United Kingdom | BOE | The Prudential Regulation Authority (PRA) issued a consultation paper proposing updates to the UK’s capital buffers framework. These updates align with the government’s transition towards the Financial Services and Markets Act (FSMA) 2023 model of financial regulation, which empowers regulators to directly set rules previously embedded in EU-derived law. The consultation outlines changes to the methodologies for identifying and applying buffers for Global and Other Systemically Important Institutions (G-SIIs and O-SIIs), ensuring consistency with international standards while streamlining the regulatory process. The proposals, which include revoking legacy regulations and transferring responsibilities to the PRA, aim to enhance clarity and efficiency for UK banks and investment firms. Responses to this consultation are invited until 12 December 2024, with implementation expected in Q2 2025. | ||
United Kingdom | BOE | Supervisory Expectations for Credit Risk Internal Ratings-Based Approach | The Prudential Regulation Authority (PRA) has issued a supervisory statement (SS4/24) that outlines near-final guidance on the application of the Internal Ratings-Based (IRB) approach for calculating credit risk-weighted assets. Effective from 1 January 2026, this guidance aligns with the Basel 3.1 standards and emphasizes the need for PRA-authorized firms to maintain high levels of conservatism in their internal models. The statement details expectations on data quality, model validation, and risk parameter estimation (such as Probability of Default and Loss Given Default), stressing the importance of reliable, representative data and the use of appropriate post-model adjustments. The PRA also sets out criteria for firms applying for permission to use the IRB approach, requiring them to demonstrate material compliance with the Credit Risk rules. These updates aim to enhance the accuracy and transparency of credit risk assessments, thereby strengthening the resilience of the UK’s financial sector. | |
United Kingdom | BOE | Supervisory Statement on Credit Risk and Definition of Default | The Prudential Regulation Authority (PRA) issued a near-final supervisory statement (SS3/24) in September 2024, detailing updated expectations for the definition of default concerning credit risk. Effective from 1 January 2026, this update aligns with the Basel 3.1 standards and applies to PRA-authorized banks, building societies, and other financial institutions. Key elements include clarifications on past-due criteria, specific credit risk adjustments, and indications of unlikeliness to pay, such as distressed restructuring and bankruptcy. The statement also outlines criteria for returning defaulted exposures to non-defaulted status and stresses the importance of consistent application across types of exposures, ensuring improved governance and risk management practices. These updates are part of the UK’s ongoing efforts to strengthen financial stability and align with international regulatory standards. | |
United Kingdom | BOE | The Prudential Regulation Authority (PRA) has issued a consultation paper (CP9/24) on streamlining the Pillar 2A capital framework and improving the capital communications process for PRA-regulated entities. This paper, published on 12 September 2024, proposes retiring the refined methodology introduced in 2018 to address discrepancies in capital requirements between standardized and internal ratings-based approaches. With the implementation of the Basel 3.1 standards by 1 January 2026, the PRA aims to simplify capital requirements for firms, reduce regulatory complexity, and enhance transparency. The changes are designed to address competition concerns, align with the Basel 3.1 risk-weight framework, and ensure that firms maintain capital levels proportional to their risk exposures. Feedback on the proposals is invited until 12 December 2024, with implementation set for March 2025. | ||
United Kingdom | BOE | Consultation on the Definition of Capital for Banks and Financial Institutions | The Prudential Regulation Authority (PRA) launched Consultation Paper CP8/24, proposing updates to the UK’s capital framework for banks and financial institutions. These updates are part of the broader transition to the Financial Services and Markets Act (FSMA) 2023 model and involve revoking parts of the Capital Requirements Regulation (CRR) previously retained from EU law. The PRA plans to restate the definition of capital requirements in its Rulebook, with minimal substantive changes to existing CRR provisions. However, adjustments are proposed to enhance transparency and proportionality, particularly concerning Pre/Post-Issuance Notification (PIN) requirements, inclusion of interim profits in Common Equity Tier 1 (CET1), and regulatory capital treatment of non-CET1 shares. Feedback is welcomed until 12 December 2024, with implementation expected in early 2025. The goal is to streamline capital requirements while promoting resilience and competitiveness in the UK financial sector. | |
United Kingdom | BOE | Implementing Basel 3.1 Standards: Key Updates on Credit Risk and Pillar 2 Framework | The Prudential Regulation Authority (PRA) has published Policy Statement PS9/24, finalizing its approach to implementing the Basel 3.1 standards in the UK. Effective from 1 January 2026, these rules will significantly affect the way banks calculate risk-weighted assets (RWAs) for credit risk, including standardized and internal ratings-based (IRB) approaches. Key changes include a more granular approach to exposure class allocation, stricter rules on the use of credit ratings, and the introduction of an output floor that limits how low a firm’s RWAs can fall below standardized levels. Furthermore, the PRA has enhanced the Pillar 2A framework to ensure proportional capital requirements across the industry, specifically for lending to SMEs and infrastructure projects. These reforms aim to strengthen the resilience of UK financial institutions while ensuring competitiveness and alignment with global standards. | |
United Kingdom | BOE | Updated Supervisory Statement on Counterparty Credit Risk for UK Financial Institutions | The Prudential Regulation Authority (PRA) released a near-final update to its supervisory statement on Counterparty Credit Risk (SS12/13), which is set to take effect on 1 January 2026. The statement, aligned with the Basel 3.1 standards, outlines key expectations for UK banks, building societies, and PRA-authorized investment firms regarding the treatment of securities financing transactions (SFTs), the use of internal models, and capital requirements for credit valuation adjustment (CVA) risk. The guidance emphasizes stringent controls over model changes, including attestation requirements by senior management and robust back-testing. Additionally, it provides criteria for identifying qualifying central counterparties (QCCPs) and the inclusion of SFTs in the scope of CVA risk. These updates aim to enhance transparency and governance around counterparty credit risk management while maintaining alignment with international regulatory frameworks. | |
United Kingdom | BOE | Updated Guidance on Credit Risk Mitigation for Financial Institutions | The Prudential Regulation Authority (PRA) published an update to its Supervisory Statement SS17/13 on credit risk mitigation, which will take effect on 1 January 2026. This update, aligned with the Basel 3.1 standards, offers detailed guidance to UK banks, building societies, and PRA-regulated financial firms on recognizing credit risk mitigation in their capital calculations. The guidance clarifies the eligibility of guarantees and credit derivatives as unfunded credit protection, netting agreements, and the treatment of financial collateral where there is a correlation between collateral value and the obligor’s credit quality. Importantly, the updates provide firms with clear expectations regarding legal enforceability, the impact of bail-in provisions, and the recognition of financial collateral under various risk mitigation frameworks. This move is part of the UK’s ongoing efforts to strengthen its regulatory framework and ensure resilience across its financial institutions. | |
United Kingdom | BOE | The Prudential Regulation Authority (PRA) has issued an updated Supervisory Statement SS34/15 in September 2024, providing detailed guidance on how UK banks and financial institutions should complete their regulatory reports. Effective from 1 January 2026, this guidance aligns with the Basel 3.1 standards and ensures firms accurately report financial data under the PRA Rulebook. The statement includes updates on data items such as balance sheets, income statements, and sectoral information. It also covers new requirements for completing the Mortgage Lenders and Administrators Return (MLAR), close links reporting, and UK FINREP templates. These guidelines aim to streamline the regulatory reporting process, promoting consistency and efficiency, while supporting the PRA’s broader objective of ensuring the safety and soundness of financial institutions. | ||
United Kingdom | BOE | The Bank of England and Prudential Regulation Authority (PRA) have released Consultation Paper CP7/24, proposing a simplified capital regime for Small Domestic Deposit Takers (SDDTs) as part of the Strong and Simple Framework. This regime, designed to streamline prudential regulations for non-systemic, domestic-focused banks and building societies, aims to reduce regulatory complexity while maintaining resilience. Key proposals include simplifying Pillar 1 capital requirements based on the Basel 3.1 standards, eliminating the need for complex counterparty credit risk assessments, and introducing a Single Capital Buffer (SCB) to replace the current buffer framework. The PRA expects these changes to lower operational costs for SDDTs and promote competition by making regulatory compliance more manageable for smaller institutions. The proposed implementation date is 1 January 2027, and the consultation is open for feedback until 12 December 2024. | ||
Insurance | Mauritius | FSC | The Financial Services Commission (FSC) of Mauritius issued updated guidelines on stress test requirements for long-term insurers, effective from 4 September 2024. These guidelines, mandated under the Insurance (Long Term Insurance Business Solvency) Rules 2024, help insurers calculate the minimum level of assets needed to ensure they can meet liabilities under adverse financial conditions. The updated stress test requirements include the Termination Capital Adequacy Requirements (TCAR) and Ordinary Capital Adequacy Requirements (OCAR), which cover various risk factors such as lapse and surrender risks, mortality and morbidity fluctuation, and investment risks. These measures aim to enhance the solvency and financial resilience of long-term insurers against unexpected shocks while maintaining policyholder protection. | |
Singapore | MAS | Amendments to Resolution of Financial Institutions Regulations | The Monetary Authority of Singapore (MAS) released a consultation paper outlining proposed amendments to the Financial Services and Markets (Resolution of Financial Institutions) Regulations 2024. The key updates focus on extending the statutory bail-in regime to the insurance sector, which would allow MAS to bail-in liabilities of Singapore-incorporated insurers and designated insurance holding companies. Additionally, MAS proposes limiting the duration of temporary stays on reinsurers’ early termination rights to two business days. These measures aim to enhance the resolution framework for financial institutions, ensuring that insurers are more resilient and that systemic risks are better managed. MAS is inviting feedback from the industry until 11 October 2024. | |
Investment | Canada | BOC | The Department of Finance and the Bank of Canada have launched consultations to gather input from government securities distributors, institutional investors, and other stakeholders on the design and operation of Canada’s domestic debt program for 2025-26. These consultations, held in September and October 2024, aim to ensure that the government’s borrowing strategies continue to balance cost and risk while maintaining a well-functioning market for government securities. With Canada’s debt issuance increasing due to fiscal needs, feedback is sought on issues such as the impact of increased government securities on investor behaviour, treasury bill demand, and bond auction strategies. Insights from market participants will shape the upcoming debt management strategy, ensuring efficient funding for the government and market stability. A summary of the consultations will be published on the Bank of Canada’s website. | |
Malta | MFSA | The Malta Financial Services Authority (MFSA) issued an update to its template for gathering information on the use of benchmarks as per Regulation (EU) 2016/1011, commonly known as the Benchmarks Regulation (BMR). The updated template, which modifies the “Exposure Term to Maturity” dates, now reflects revised reporting periods extending to 2027. The deadline for market participants, excluding insurance intermediaries, to submit their exposure details has been extended to 7 October 2024, with data required as of 31 August 2024. Entities must complete the updated form unless they have no benchmark exposure, as NIL returns are not required. Failure to submit will categorize entities as non-users of benchmarks for regulatory purposes. | ||
United Kingdom | FCA | The Financial Conduct Authority (FCA) issued Consultation Paper CP24/19, which proposes the introduction of new regulatory reporting returns for consumer credit firms involved in activities such as credit broking, debt adjusting, debt counselling, and providing credit information services. The proposed returns aim to improve the quality and relevance of data collected by the FCA to better supervise firms and mitigate potential consumer harm. This new return would replace several existing reporting requirements, introducing more tailored questions to match firms’ business models. The consultation is open for feedback until 31 October 2024, with the final policy statement expected in early 2025. | ||
United States | CFTC | The Commodity Futures Trading Commission (CFTC) adopted amendments to Part 40 of its regulations under the Commodity Exchange Act (CEA). These changes, aimed at simplifying and clarifying processes for registered entities such as designated contract markets (DCMs), derivatives clearing organizations (DCOs), and swap execution facilities (SEFs), cover self-certifications, rule amendments, and new product listings. Key amendments include streamlining the procedures for listing products, removing outdated requirements like cover sheets, and clarifying the rules related to dormant products and margin methodologies. The amendments are designed to enhance the efficiency of regulatory submissions while maintaining market integrity. The new rules will take effect 30 days after their publication in the Federal Register. |
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