In the ever-changing world of financial regulations, staying current with new compliance updates is essential for businesses. This week’s roundup highlights key regulatory developments from across the globe, affecting financial institutions, investment firms, and service providers. Covering updates on digital asset supervision, correspondent banking relationships, insolvency regulations, and capital adequacy adjustments, these changes emphasize the importance of maintaining transparency, enhancing risk management, and safeguarding market integrity. With these regulatory updates, businesses can better navigate the complex and evolving global regulatory environment.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | Canada | Fintrac-Canafe | The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) provides detailed compliance guidance for financial entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The guidance outlines the requirements for Canadian financial institutions entering correspondent banking relationships with foreign financial institutions. Key obligations include verifying that the foreign institution is not a shell bank, obtaining senior management approval, monitoring transactions for suspicious activities, and ensuring the foreign institution complies with anti-money laundering (AML) and anti-terrorist financing (ATF) measures. Institutions must also keep extensive records, including agreements, verification of the foreign institution’s identity and business practices, and assessments of their AML/ATF compliance. The guidance emphasizes the need for ongoing risk assessment and monitoring of these relationships to detect any suspicious or terrorist financing activities. Specific exceptions apply to certain correspondent banking activities, such as payment processing by credit card or prepaid payment products. | |
European Union | European Commission | New Standards for Information Exchange in Crypto-Assets Supervision | The European Commission adopted a delegated regulation supplementing the Markets in Crypto-Assets (MiCA) Regulation (EU 2023/1114). The new standards specify the types of information that must be exchanged between competent authorities across EU Member States to ensure effective supervision, investigation, and enforcement regarding crypto-assets, including asset-referenced tokens and e-money tokens. The regulation mandates sharing details on issuers, service providers, and market activities, aiming to enhance oversight and market integrity, while ensuring compliance with financial stability and investor protection rules. These standards will take effect 20 days after their publication in the Official Journal of the European Union. | |
European Union | European Commission | The European Commission initiated a targeted consultation to assess the functioning of the EU securitisation framework. The consultation aims to gather stakeholder feedback on several key areas, including the effectiveness of the current securitisation regulations, challenges faced by SMEs in accessing securitisation, due diligence, and transparency requirements. It also explores how the Simple, Transparent, and Standardised (STS) securitisation label can be improved to attract more investment and the potential for a pan-European securitisation platform. Responses will help shape future regulatory adjustments to promote sustainable growth and ensure financial stability in EU securitisation markets. | ||
European Union | EBA | Guidelines on Redemption Plans for Crypto-Asset Issuers under MiCAR | The European Banking Authority (EBA) published final guidelines for redemption plans under the Markets in Crypto-Assets Regulation (MiCAR). These guidelines apply to issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs) and provide clarity on how to structure redemption plans to ensure orderly and equitable redemption when issuers are unable to meet their obligations. The guidelines outline specific governance requirements, proportionality principles, and contingency measures, emphasizing the protection of token holders’ rights while minimizing market disruption. Issuers must regularly update redemption plans to address changes in business or market conditions and coordinate with competent authorities for implementation. | |
Germany | BaFin | BaFin Clarifies Expectations for Dedicated Account Access Interfaces under PSD2 | BaFin, the German financial supervisory authority, has issued guidelines clarifying its expectations regarding PSD2 account access interfaces for payment service providers. The updates focus on three key issues: publishing statistics on interface availability and performance, prohibiting unauthorized “screen scraping” of redirection pages, and reporting failures in dedicated interfaces. Providers must now publish statistics covering the past four quarters, while redirection pages are for exclusive use by payment service users, prohibiting third-party embedding techniques. In cases of interface failures, immediate reporting to BaFin is required, including detailed explanations of the disruption and any remedial actions taken. These measures align with the European Banking Authority’s guidelines to ensure compliance and technical integrity in PSD2 implementations. | |
Gibraltar | GFSC | Guidance Notes on Financial Management, Prudent Person Principle, and Corporate Governance | The Gibraltar Financial Services Commission (GFSC) published Guidance Notes on Financial Management and Planning by Insurers, the Prudent Person Principle, and Corporate Governance: Board Responsibilities for Banks and Insurers. These notes follow an industry consultation and align with the Prudential Regulatory Authority’s (PRA) standards, in preparation for the Gibraltar Authorisation Regime (GAR). The Financial Management Guidance outlines expectations for risk appetite development, business planning, and capital distribution. The Prudent Person Principle Guidance focuses on investment strategy and governance, particularly regarding non-traded assets and intragroup loans. The Corporate Governance Guidance emphasizes board responsibilities, with specific focus on areas that will receive supervisory attention. | |
Switzerland | FINMA | The Swiss Financial Market Supervisory Authority (FINMA) initiated a consultation on its new Insolvency Ordinance, which consolidates and replaces three existing ordinances: the FINMA Banking Insolvency Ordinance, the Insurance Bankruptcy Ordinance, and the Collective Investment Schemes Bankruptcy Ordinance. This consolidation aims to streamline insolvency proceedings for all financial institutions under FINMA’s jurisdiction, including banks, insurance companies, and collective investment schemes. The new ordinance reflects recent revisions to the Banking Act and Insurance Supervision Act, ensuring a standardized approach while maintaining institution-specific provisions to a minimum. The consultation will run until December 9, 2024, and is based on feedback from industry experts and associations. | ||
United Kingdom | FCA | CFRF Publishes Technical Data Guidance on Nature-Related Risks for Financial Institutions | The Climate Financial Risk Forum (CFRF) released its “Nature-Related Risk: Technical Data Guidance” to support financial institutions in assessing and managing nature-related risks. The guidance emphasizes the importance of data in identifying nature-related risks and opportunities, with a focus on geospatial data and Earth observation tools for risk quantification. It provides practical advice on integrating nature-related risk assessments into existing climate risk frameworks and highlights emerging market opportunities, such as biodiversity credits, to encourage nature-positive outcomes. This guidance complements regulatory reporting requirements like those outlined by the Taskforce on Nature-related Financial Disclosures (TNFD) and addresses evolving expectations for managing nature-related financial risks. | |
United Kingdom | FRC | The Financial Reporting Council (FRC) released new Technical Actuarial Guidance on Models to support actuaries in complying with Principle 5 of TAS 100, which ensures models used in actuarial work are fit for purpose and subject to robust governance. The guidance addresses key areas such as understanding model limitations, mitigating model risks, and identifying biases. It also covers the governance and validation processes for models, including those utilizing artificial intelligence or machine learning. The FRC emphasizes proportionality in applying these principles based on the complexity and impact of models, aiming to enhance transparency, accuracy, and reliability in actuarial reporting. | ||
Banking | Chile | CMF | The Financial Market Commission (CMF) of Chile launched a public consultation for a new version of the adjustments to capital requirements regulations, specifically focusing on Pillar 2 of the Basel III framework. Pillar 2 allows for additional capital requirements for banks based on risks not fully addressed by Pillar 1, such as strategic, climate, and cybersecurity risks. The updated proposal includes refinements to market risk assessments, clarifications on internal equity targets, and improvements to the capital adequacy review process. These changes follow feedback from the initial consultation in early 2024 and aim to enhance supervisory oversight and risk management. The proposed adjustments will take effect gradually, starting from May 2025. | |
European Union | EBA | The European Banking Authority (EBA) launched a public consultation on the Draft Implementing Technical Standards (ITS) for the Pillar 3 Data Hub (P3DH). This initiative aims to centralize the public disclosures of prudential information from large and other institutions across the European Economic Area (EEA), enhancing transparency and market discipline. The P3DH will provide a single access point for users to view and compare prudential data, with a focus on usability and consistency. The draft ITS outlines the technical requirements for submitting quantitative and qualitative data in standardized formats, aiming for full implementation by June 2025. This consultation is part of the broader regulatory framework under the EU Capital Requirements Regulation (CRR), supporting enhanced data access and comparability across financial institutions. The EBA invites comments until November 11, 2024. | ||
European Union | European Union | Regulation to Enhance Access to Public Capital Markets for SMEs | The Council of the European Union adopted a regulation aimed at making public capital markets more accessible and attractive for companies, particularly small and medium-sized enterprises (SMEs). The regulation amends several key financial laws, including Regulations (EU) 2017/1129, (EU) No 596/2014, and (EU) No 600/2014. These changes are designed to streamline capital market processes, reduce regulatory burdens, and facilitate easier access to funding for SMEs. The legislative act was approved during the 4048th Economic and Financial Affairs Council meeting in Luxembourg. This regulatory update is expected to bolster growth and investment opportunities within the EU. | |
Hong Kong | HKMA | Basel III Final Reform Package to be Implemented in Hong Kong on January 1, 2025 | The Hong Kong Monetary Authority (HKMA) announced the gazettal of the commencement notice for the Banking (Capital) (Amendment) Rules 2023, with an effective date of January 1, 2025. This marks the formal incorporation of the Basel III final reform package into local legislation. The amendments address critical aspects of banking regulation, including credit risk, operational risk, the output floor, and sovereign concentration risk, as well as market risk and credit valuation adjustment (CVA) risk. Concurrent amendments to the Banking (Disclosure) Rules, Banking (Liquidity) Rules, and Banking (Exposure Limits) Rules will also take effect on the same date. The reforms aim to strengthen the resilience of financial institutions in line with international Basel III standards. | |
Luxembourg | CSSF | The European Banking Authority (EBA) released updated reporting requirements, focusing on Pillar 3 disclosures. These requirements aim to enhance transparency and consistency in financial institutions’ public disclosures, particularly regarding environmental, social, and governance (ESG) risks, and interest rate risk in the banking book (IRRBB). The new reporting templates will ensure that large institutions, especially those with significant ESG exposure, provide detailed and standardized information. The first submissions under these requirements are expected by early 2025, with the final versions due throughout the year, depending on the institution’s reporting structure and size. This update aligns with the broader CRR framework, contributing to more robust risk management and transparency across the EU financial sector. | ||
Luxembourg | CSSF | The Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg issued Regulation No. 24-06, maintaining the countercyclical capital buffer (CCyB) at 0.5% for the fourth quarter of 2024. This decision, based on recommendations from the Systemic Risk Committee (CRS) and in line with the EU’s regulatory framework, aims to reinforce the financial sector’s resilience during periods of potential economic instability. The buffer helps absorb losses and maintain credit availability in times of economic downturn. This measure continues to reflect a cautious approach amidst an uncertain economic outlook, characterized by high interest rates and declining credit and real estate prices | ||
Mexico | Banxico | Public Consultation on Cash Operations and Correspondent Services | The Bank of Mexico announced a public consultation on proposed regulations related to cash operations, correspondent services, and the handling of potentially counterfeit or altered currency. The new regulations aim to consolidate and update existing rules, replacing Circular 9/2023. The proposals also include revisions to Circular 8/2023, specifically regarding the issuance, circulation, and withdrawal of banknotes and coins, as well as new guidelines for correspondent banking services. The consultation period is open until November 15, 2024, allowing the public and stakeholders to submit feedback via the Bank of Mexico’s regulatory consultation portal. | |
Portugal | BDP | Banco de Portugal launched Public Consultation No. 4/2024 regarding a draft notice to set the countercyclical capital buffer (CCyB) at 0.75% of the total credit exposures of the national banking sector to the non-financial private sector. This percentage will apply both individually and on a consolidated basis, beginning at a neutral phase of cyclical systemic risk. The buffer aims to enhance the resilience of financial institutions, allowing them to absorb unexpected losses from future systemic shocks. The consultation is open until November 19, 2024, with contributions to be submitted in editable format via email. This initiative aligns with broader European trends, as recommended by the European Central Bank, to strengthen releasable capital buffers. | ||
United Kingdom | BOE | The Bank of England, through the Prudential Regulation Authority (PRA), published Consultation Paper CP12/24, proposing changes to the reporting and disclosure dates for resolution assessments. The amendments aim to provide greater flexibility by removing fixed biennial reporting and disclosure deadlines, allowing firms to better prepare their resolution plans. The proposed changes will apply to UK banks and building societies with retail deposits exceeding £50 billion. This consultation is open until November 8, 2024, and the PRA plans to implement the new rules by the first quarter of 2025. | ||
Insurance | European Union | European Union | The European Parliament has approved key amendments to the Solvency II Directive (Directive 2009/138/EC), enhancing the proportionality of supervision and expanding tools for macro-prudential supervision. These changes aim to strengthen insurance sector resilience, aligning it with sustainability risks, such as climate change, and modernizing reporting requirements. The amendments also introduce flexible measures for smaller, non-complex insurance entities, streamline cross-border supervision, and incorporate climate-related scenario analyses into risk management. This reform marks a significant step towards a more sustainable and risk-aware European insurance market. | |
European Union | European Union | Directive on Recovery and Resolution of Insurance and Reinsurance Firms Adopted | The European Parliament has adopted the directive establishing a framework for the recovery and resolution of insurance and reinsurance undertakings. This framework introduces preventive measures and resolution tools aimed at maintaining financial stability and protecting policyholders in the event of firm failures. The directive also amends several related regulations, ensuring that failing firms can be managed in a way that minimizes risks to the broader economy and financial system. Key provisions include the establishment of resolution authorities, pre-emptive recovery plans, and resolution plans for critical firms, ensuring cross-border coordination and preparedness. | |
Investment | Bermuda | BMA | Amendments to Digital Asset Business Act and Prudential Standards | The Bermuda Monetary Authority (BMA) released a consultation paper proposing amendments to the Digital Asset Business Act 2018 and its associated Prudential Standards to strengthen the regulatory framework for digital asset businesses. Key changes include defining “control of assets,” enhancing rule-making powers related to capital and liquidity requirements, and introducing mandatory wind-down plans for digital asset businesses. The proposals also replace certain civil penalties with late fees and clarify reporting requirements. Stakeholders are invited to submit feedback by December 9, 2024, as part of the BMA’s effort to support responsible innovation and ensure robust supervision in the rapidly evolving digital asset sector |
Chile | CMF | Public Consultation on Accreditation of Suitability and Knowledge for Financial Services | The Financial Market Commission (CMF) launched a public consultation regarding adjustments to the regulations on accreditation of suitability and knowledge for individuals providing financial services. This follows General Rule No. 503, issued in January 2024, which mandates that stockbrokers, securities agents, portfolio managers, and others must pass an exam and participate in a continuous training program to maintain accreditation. The updated proposal ensures that accreditations valid as of July 1, 2024, will be recognized under the new mechanism, allowing those individuals to continue their services without needing to re-take the exam, provided they fulfil the ongoing training requirements. Public feedback is open until October 30, 2024. | |
France | AMF | Updated Guidelines on Portfolio Management and Collective Investment Schemes | The Autorité des marchés financiers (AMF) has revised its Position-Recommendation DOC-2012-19 concerning the activity programs of portfolio management companies and self-managed collective investment schemes. The update provides enhanced guidelines on organizational structure, risk management, and compliance requirements to align with EU financial regulations. It emphasizes stricter capital adequacy measures, improved internal controls, and enhanced transparency in investment strategies. These revisions aim to strengthen the resilience and governance of investment firms, ensuring they meet both domestic and international regulatory standards in a rapidly evolving financial landscape. |
Whether you’re dealing with updates in crypto-asset supervision, correspondent banking rules, or adjusting to capital adequacy requirements, FinregE’s AI-powered platform ensures that your organization remains compliant and agile in the face of regulatory challenges. Book a demo today and see how FinregE can streamline your compliance processes, helping you stay ahead in the fast-paced regulatory landscape.
