In an era of constant regulatory evolution, financial institutions and market participants face the ongoing challenge of adapting to new standards and requirements. Regulatory roundup for week 39 offers a comprehensive look at the latest developments shaping the financial landscape across multiple jurisdictions. From enhanced reporting standards to strengthened consumer protections, these updates reflect the global push towards greater transparency, sustainability, and market integrity. As we navigate these changes, it’s crucial for industry professionals to stay informed and proactive in their compliance efforts.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | Germany | DRSC | Exposure Draft on Financial Reporting Due Process Procedures | The European Financial Reporting Advisory Group (EFRAG) has issued an exposure draft detailing the Due Process Procedures (DPP) for its financial reporting activities. The document formalizes the process EFRAG follows when providing technical advice to the European Commission and contributing to the International Accounting Standards Board (IASB) standard-setting process. Key elements include public consultation requirements, stakeholder involvement, transparency in technical discussions, and the publication of comment letters. The procedures ensure EFRAG’s independence and public accountability while promoting European views on IFRS Accounting Standards. Public comments on this draft are invited by December 31, 2024. |
Global | IFRS | The IFRS Foundation released a guide titled Voluntarily applying ISSB Standards—A guide for preparers to support companies in adopting ISSB Standards voluntarily. This guide aims to assist companies in aligning with IFRS S1 and IFRS S2 Standards and effectively communicating their sustainability efforts to investors. It highlights the growing global demand for uniform sustainability disclosures and offers practical guidance on navigating the adoption process. This development strengthens the role of ISSB Standards as a global baseline for sustainability reporting, helping companies meet investor expectations and regulatory requirements. | ||
Global | UNEPFI | Finance for Nature Positive: Building a Framework for Financial Institutions | The Finance for Biodiversity Foundation and the United Nations Environment Programme Finance Initiative (UNEP FI) released a discussion paper titled Finance for Nature Positive: Building a Working Model. The paper aims to gather feedback from the financial sector on a proposed framework for supporting the “Nature Positive” goal, aligned with the Global Biodiversity Framework (GBF). This goal focuses on halting and reversing biodiversity loss by 2030, with full recovery by 2050. The framework provides definitions and guidance for financial institutions to manage and mitigate negative impacts on nature while promoting positive biodiversity outcomes. It emphasizes three transformative levels: compliance with the mitigation hierarchy, transformative actions for GBF implementation, and integrating nature-positive goals into organizational strategy and governance. Financial institutions are called upon to play a pivotal role in driving biodiversity conservation, reducing harmful financial flows, and supporting nature-positive transitions. | |
Global | WBCSD | Deforestation Disclosure Guidelines for Financial Institutions | A new guide for financial institutions, released in September 2024, emphasizes the importance of disclosing deforestation and land-use change risks. This guide encourages financial institutions (FIs) to integrate deforestation into their climate- and nature-related disclosures, in line with emerging global standards such as IFRS S2 and TNFD. With increasing regulations such as the EU’s Sustainable Finance Disclosure Regulation (SFDR) and Corporate Sustainability Reporting Directive (CSRD), FIs are urged to assess their exposure to deforestation risks, track their financed deforestation activities, and disclose annually through platforms like CDP. The guide highlights the material risks posed by deforestation on climate and biodiversity and provides a roadmap for FIs to adopt deforestation-free finance practices, helping mitigate reputational and litigation risks while supporting global sustainability efforts. | |
United Kingdom | FCA | Consultation on Enhanced Safeguarding for Payments and E-Money Firms | Financial Conduct Authority (FCA) launched a consultation on proposed changes to the safeguarding regime for payments and e-money firms. This initiative, documented in Consultation Paper CP24/20, aims to strengthen consumer protection by addressing weaknesses in the current safeguarding practices, which have led to significant financial shortfalls during insolvencies. Key proposals include enhanced monitoring, stricter reporting requirements, and the introduction of a statutory trust over safeguarded funds. The FCA seeks industry feedback by December 17, 2024, to finalize the new rules and ensure more robust protections for consumers and market integrity. | |
United Kingdom | GOV.UK | DBT | UK Sustainability Reporting Standards: A Step Towards Green Finance | The UK government provided an update on its progress towards establishing UK Sustainability Reporting Standards (UK SRS), leveraging the global framework developed by the International Sustainability Standards Board (ISSB). Formed under the IFRS Foundation, the ISSB aims to create global standards for sustainability-related financial disclosures, with the goal of providing investors with comparable and decision-useful information. Following the publication of IFRS S1 and IFRS S2 in June 2023, the UK government is assessing their suitability for adoption into UK law by early 2025. If endorsed, these standards will become the foundation for sustainability reporting for UK-listed companies, with potential wider applicability to non-listed firms. The UK government has established two committees, the Technical Advisory Committee (TAC) and the Policy and Implementation Committee (PIC), to oversee the technical evaluation and implementation of the standards. | |
Banking | European Union | European Union | EU Directive Aims to Improve Capital Markets and SME Access to Financing | The European Union adopted amendments to Directive 2014/65/EU aimed at making public capital markets more accessible and attractive to companies, especially small and medium-sized enterprises (SMEs). This new directive introduces reforms to streamline listing processes, reduce regulatory burdens, and increase research coverage for SMEs. Key changes include adjustments to research unbundling rules, allowing greater flexibility for investment firms in organizing payments for research and execution services, as well as a reduction in the minimum free float requirement from 25% to 10%. These reforms are designed to facilitate SME growth and promote investor confidence, supporting the EU’s broader goal of improving capital market efficiency and competition. |
Luxembourg | CSSF | Regulation on Distributable Results for Credit Institutions Using Fair Value Accounting | The Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg issued Regulation No. 14-02, establishing guidelines for determining distributable results and reserves for credit institutions applying fair value measurement in their statutory accounts. Effective from 31 December 2014, the regulation sets limitations on the distribution of unrealized gains and reserves, ensuring that such gains are allocated to non-distributable reserves. This regulation applies to credit institutions using Luxembourg GAAP or IFRS standards. Its primary aim is to protect shareholders and creditors by enforcing prudence in profit distribution, particularly for unrealized fair value gains. | |
Insurance | Netherland | Dutch Central Bank | Consultation on Asset-Intensive Reinsurance Contracts Supervision | The Dutch Central Bank (DNB) published a Q&A for consultation regarding the consent requirement under Article 3:267e of the Financial Supervision Act (Wft). This provision mandates that insurers in the Netherlands obtain DNB’s approval before entering or amending reinsurance contracts that allow the reinsurer to hold assets outside the European Economic Area (EEA). The consultation aims to clarify which reinsurance contracts fall under this requirement. Stakeholders can submit responses until November 1, 2024, with the final policy expected to be published after reviewing the feedback received. |
Singapore | MAS | The Monetary Authority of Singapore (MAS) issued a consultation paper inviting feedback on proposed guidelines related to MAS Notice 134, which outlines recovery and resolution planning requirements for insurers and designated financial holding companies (DFHCs). These guidelines aim to provide further clarity on key areas such as recovery triggers, recovery options, and maintaining operational continuity during times of severe financial stress. The guidelines, set to take effect on January 1, 2025, focus on ensuring that critical functions continue to operate while outlining expectations for governance, management information systems, and communication strategies. MAS invites comments from stakeholders until October 25, 2024. | ||
United Kingdom | BOE | The Prudential Regulation Authority (PRA) issued a statement regarding the impact of the ongoing Solvency II review on existing waivers and modifications to PRA rules. The PRA indicated that the final rules from the review, set to take effect on December 31, 2024, may require updates to these waivers and modifications, especially where references to retained EU law or the PRA Rulebook are involved. Affected firms will need to provide consent to update the wording of their current directions by December 30, 2024, to ensure their validity under the new framework. The PRA will contact impacted firms in mid-November with further instructions on this process. | ||
Investment | Japan | JFSA | Japan FSA’s Response to Securities Trading Regulation Comments | The Japan Financial Services Agency (FSA) has provided a comprehensive response to comments regarding recent amendments to the Cabinet Office Order on the Regulation of Securities Transactions. Key feedback included suggestions on adjusting the criteria for evaluating the impact of stock issuance decisions on investor behaviour. While some commenters argued for more flexibility in criteria, such as considering dilution rates in addition to fixed monetary thresholds, the FSA maintained that current standards are appropriate, especially for smaller companies. The FSA also clarified that actions such as stock allocation through employee shareholding trusts and deferred stock compensation schemes fall within the scope of the revised regulations and confirmed that specific equity dilution rules should remain in place to prevent excessive stock issuance without sufficient shareholder oversight. These clarifications aim to ensure transparency and safeguard investor interests while aligning with Japan’s broader regulatory reforms in capital markets. |
Philippines | SEC | The Securities and Exchange Commission (SEC) of the Philippines has released new guidelines for accrediting market participants offering Personal Equity and Retirement Account (PERA) products. Memorandum Circular No. 14, Series of 2024, issued on September 19, 2024, outlines the requirements for SEC-regulated entities seeking to register as PERA administrators or investment managers under the PERA Act of 2008. Entities like securities brokers, investment houses, and fund managers can apply, with qualifications such as a minimum net worth of P100 million, compliance with corporate governance standards, and adequate personnel and systems. The SEC has temporarily lowered the security deposit requirement to encourage more market participation. Additionally, investment managers must demonstrate professional experience and submit relevant documentation as part of their application. | ||
Sweden | FSA | Notification Guidelines for Investment Firms Under LV and MIFIR | Sweden’s Finansinspektionen (FI) has introduced updated guidelines for investment firms operating under the Securities Market Act (LV) and MIFIR. These firms must notify FI if they engage in specific activities, including systematic internal trading, algorithmic trading, or providing direct electronic access to trading venues. Additionally, firms applying for exemptions related to own-account trading in commodity derivatives and emission allowances must comply with these reporting requirements. The updates emphasize transparency, with firms required to provide detailed information about their activities, including financial instruments involved. The European Securities and Markets Authority (ESMA) will also maintain a register of designated publishing entities, starting September 29, 2024, for firms managing public disclosures under MIFIR. |
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