The financial markets continue to evolve rapidly, with constant regulatory changes impacting institutions across banking, investment, and insurance sectors. Week 42 brought significant developments aimed at enhancing transparency, promoting sustainability, and ensuring stability in financial systems. These updates, spanning various facets of the financial landscape, influence operational strategies, compliance obligations, and risk management practices for market participants. Whether it’s amendments that foster competition or regulations aimed at aligning with sustainability goals, the latest changes create both challenges and opportunities for firms navigating the complexities of today’s financial environment.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | Bahrain | CBB | Consultation on Regulatory Framework for Stablecoin Issuance | The Central Bank of Bahrain (CBB) has introduced the Stablecoin Issuance and Offering Module as part of its broader regulatory framework under Rulebook Volume 6, governing the issuance and offering of stablecoins in the Kingdom of Bahrain. This new regulation outlines the licensing requirements, eligibility criteria, and operational standards for stablecoin issuers. Key provisions include a strict 1:1 backing requirement for stablecoins by fiat currency, restrictions on paying interest, and mandatory whitepaper disclosures. The CBB also emphasizes robust compliance with AML/CFT measures and governance practices. This framework aims to ensure transparency, safeguard reserve assets, and protect investors. Stakeholders are required to provide their comments on the proposed module by 17 November 2024. |
Chile | CMF | Modifications to Fintec Law Regulations for Financial Service Providers | The Financial Market Commission (CMF) announced a consultation on proposed updates to General Standard No. 502. These changes target the registration and authorization procedures for financial service providers under Chile’s Fintec Law (No. 21,521). The modifications aim to streamline the application process, particularly with a looming deadline of February 3, 2025, for many submissions. Key updates include clarifying operational capacity certification requirements, regulations on “Finfluencers” disclosing compensation, and the necessity for Fintec firms to maintain comprehensive records and submit quarterly financial reports. The CMF remains committed to fostering an inclusive, innovative financial market while safeguarding users. | |
Denmark | Datatilsynet | The European Data Protection Board (EDPB) released guidance on the balancing of interests rule as outlined in Article 6(1)(f) of the GDPR. The guidance, adopted during the plenary meeting on October 8, 2024, provides a comprehensive four-part framework. It begins by introducing the rule as a lawful basis for data processing, followed by a detailed analysis of the three-step approach data controllers must follow when applying this rule. The guide also addresses the interaction between this rule and data subjects’ rights and concludes with its application in specific contexts like direct marketing and public authorities’ use. The guidance is currently open for public consultation, and the final version will be adopted by the EDPB after review. | ||
Global | FATF | Updated Mutual Evaluation and Follow-Up Procedures for AML/CFT/CPF Compliance | The Financial Action Task Force (FATF) released updated procedures for its mutual evaluations and follow-up processes, emphasizing compliance with global Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Countering the Financing of Proliferation (CPF) standards. This framework is designed to ensure countries adhere to FATF recommendations, assessing both technical compliance and the effectiveness of AML/CFT/CPF systems. The procedures, which apply to the 5th round of mutual evaluations starting in 2024, involve in-depth assessments and follow-up monitoring to track compliance, with an emphasis on transparency and peer accountability. This update aims to strengthen global efforts against financial crimes and proliferation risks. | |
Global | FSB | The Financial Stability Board (FSB) released a consultation report on the Format for Incident Reporting Exchange (FIRE), aiming to harmonize cyber incident reporting across the financial sector. The FIRE framework seeks to address fragmented reporting requirements by offering a standardized approach to incident reporting for financial institutions, enhancing both supervision and collaboration across jurisdictions. The consultation encourages feedback on various aspects of the FIRE design, including operational capacity, the handling of third-party service providers, and technical components such as the use of XBRL taxonomy for data exchange. Public comments are invited until December 19, 2024, as the FSB works towards publishing a final version by mid-2025. | ||
Romania | ASF Romania | Guidance on Data Transfer Between Central Transaction Registers Under EMIR and SFTR | The Financial Supervisory Authority (ASF) has released guidelines to clarify the processes for data transfer between central transaction registers under the European Market Infrastructure Regulation (EMIR) and the Securities Financing Transactions Regulation (SFTR). These guidelines outline the responsibilities of counterparties and transaction registers to ensure proper data reporting and facilitate the transfer of derivative contracts and securities financing transactions (SFTs) between registers. Key provisions include procedures for data portability, maintaining data integrity, and compliance with reporting obligations. The guidance ensures continuity in the reporting process, especially in cases of register migration or deregistration, aiming to enhance transparency and regulatory oversight within the financial markets. | |
Romania | ASF Romania | Implementation of ESMA Guidelines for Fund Naming Using ESG or Sustainability Terms | The Financial Supervisory Authority (ASF) has issued new regulations based on the ESMA Guidelines concerning the naming of funds using environmental, social, and governance (ESG) or sustainability-related terms. These guidelines aim to prevent misleading fund names and ensure that funds using such terms reflect their underlying investment objectives. Fund managers must ensure that 80% of the fund’s investments align with ESG or sustainability targets. Furthermore, the rules set clear thresholds for environmental or social impact investments and exclude certain types of companies from eligibility. The regulation takes effect on November 21, 2024, with existing funds required to comply by April 21, 2025. | |
Japan | JFSA | Draft Revisions to Supervision Guidelines for Public Consultation | Japan’s Financial Services Agency (FSA) released a draft partial revision of its Comprehensive Guidelines for Supervision of Major Banks, alongside updates for various other financial entities, including small and medium-sized regional institutions, cryptocurrency exchanges, and fund transfer services. The revisions are part of efforts to streamline regulations in accordance with the Digital Principles initiative, which seeks to modernize and digitize regulatory processes, particularly in areas requiring in-person inspections and information access. Stakeholders are invited to submit their comments on the proposed amendments by November 14, 2024. | |
Banking | Malaysia | BNM | Bank Negara Malaysia (BNM) released an updated Liquidity Risk Management Policy applicable to licensed banks, investment banks, Islamic banks, and financial holding companies in Malaysia. The policy emphasizes the importance of financial institutions maintaining adequate liquidity to meet cash flow obligations and withstand stress events. Key requirements include robust liquidity risk identification, monitoring, and control processes, the establishment of liquidity stress testing, and maintaining a cushion of unencumbered liquid assets. The policy, which aligns with Basel Committee principles, also mandates financial institutions to integrate liquidity risks into their pricing and performance measurement frameworks. This policy takes effect on October 15, 2025, with additional reporting requirements to begin in January 2025. | |
Singapore | MAS | Revised Guidelines to Notice 626 for AML/CFT Compliance for Banks | The Monetary Authority of Singapore (MAS) has released revised guidelines to Notice 626 on Prevention of Money Laundering and Countering the Financing of Terrorism (AML/CFT). These updates emphasize a risk-based approach for banks, detailing Customer Due Diligence (CDD), ongoing monitoring, and enhanced due diligence for higher-risk clients. Key revisions include guidance on handling Politically Exposed Persons (PEPs), reliance on third parties for CDD, and enhanced reporting mechanisms for suspicious transactions. Banks are also urged to improve internal audit and compliance frameworks, ensuring that AML/CFT obligations are met under Singapore’s regulations, with a focus on mitigating the risks of proliferation financing. | |
United Kingdom | BOE | The Bank of England and its Prudential Regulation Authority (PRA) has published a consultation paper, CP14/24, seeking feedback on proposed updates to the Large Exposures (LE) Framework. The revisions aim to align the UK framework with the Basel Committee on Banking Supervision’s standards and enhance the safety and soundness of firms by preventing large losses from exposure to single counterparties or groups of connected clients. Key proposals include the removal of internal models for calculating exposures, stricter limits for third-party exposures, and updated reporting standards. Responses to the consultation are invited until January 17, 2025, with the implementation of these changes expected shortly after the final policy statement is published. | ||
United Kingdom | BOE | Consultation on Restatement of Capital Requirements Regulation (CRR) Law | The Bank of England and Prudential Regulation Authority (PRA) has published Consultation Paper CP13/24, which addresses the restatement of remaining provisions of the Capital Requirements Regulation (CRR) as part of the UK’s post-Brexit transition. This consultation focuses on incorporating the restated CRR provisions into the PRA Rulebook, covering areas such as securitisation, counterparty credit risk, and settlement risk. The proposals also aim to update credit ratings mapping tables and address other technical amendments. The PRA invites feedback on these proposed changes by January 15, 2025, as it seeks to streamline and simplify UK prudential regulation while maintaining alignment with international standards where appropriate. | |
United Kingdom | GOV.UK | In response to the government’s consultation on the Special Resolution Regime, the Bank of England has published a new consultation focusing on amendments to its approach to setting Minimum Requirements for Own Funds and Eligible Liabilities (MREL). The consultation outlines plan to ensure that the MREL regime remains proportionate and responsive to evolving industry conditions, particularly considering the forthcoming Bank Resolution (Recapitalisation) Bill. The proposals are aimed at supporting financial stability while encouraging competition within the UK financial sector. Key aspects include the consideration of a new recapitalisation mechanism for smaller banks and ensuring that the MREL for larger banks continues to focus on bail-in strategies. These changes may require updates to secondary legislation, with industry engagement and feedback playing a crucial role in shaping the final approach. | ||
Insurance | China | Insurance Association | Project for Green Insurance Classification Guidelines Interpretation and Publishing | The China Insurance Association launched a project for the publication and dissemination of the “Green Insurance Classification Guidelines (2023 Edition) Interpretation Questions and Answers.” This initiative is part of the Association’s broader efforts to support China’s goals for carbon neutrality and green finance. The project invites qualified domestic suppliers to participate in the selection process, which involves reviewing, typesetting, proofreading, and printing 2,000 paperback copies. Suppliers must submit their proposals by October 30, 2024, and the bidding will take place on October 31, 2024. The Association is looking for suppliers who meet specific business and legal qualifications to ensure proper execution of this critical publication |
European Union | EIOPA | Consultation on Regulatory Technical Standards for Macroprudential Analysis in ORSA and PPP | The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the proposed Regulatory Technical Standards (RTS) for macroprudential analysis in the Own Risk and Solvency Assessment (ORSA) and the Prudent Person Principle (PPP). These standards aim to ensure that insurance and reinsurance undertakings incorporate macroprudential considerations, especially those with assets exceeding EUR 12 billion. The consultation addresses criteria for identifying firms required to conduct these analyses, focusing on risks related to interconnectedness, substitutability, and liquidity. Comments are invited until January 9, 2025, with the final RTS expected to provide a more structured approach to mitigating systemic risks in the insurance sector. | |
European Union | European Union | Framework for Recovery and Resolution of Insurance and Reinsurance Undertakings | The European Parliament and Council of the European Union adopted a directive establishing a comprehensive framework for the recovery and resolution of insurance and reinsurance undertakings. This directive aims to address the potential failure of these entities, ensuring minimal disruption to policyholders, beneficiaries, and the broader financial system. It provides tools for early intervention, pre-emptive recovery plans, and resolution measures, emphasizing the continuity of critical functions and the protection of policyholders. This framework harmonizes procedures across the EU, focusing on preventing systemic risks and maintaining financial stability. | |
European Union | European Union | Amendments to Solvency II for Enhanced Proportionality and Sustainability Integration | The European Parliament and Council of the European Union adopted amendments to Directive 2009/138/EC (Solvency II), enhancing proportionality, sustainability integration, and macroprudential oversight. The reforms aim to reduce regulatory burdens for smaller insurers, improve the treatment of long-term equity investments, and embed sustainability risks within risk management frameworks. The updated directive also addresses liquidity management, group supervision, and the alignment of insurance activities with the European Green Deal’s objectives. These changes reinforce the role of insurers in sustainable finance and ensure stronger supervisory cooperation across EU Member States. | |
Singapore | MAS | The Monetary Authority of Singapore (MAS) has launched a consultation paper proposing changes to the capital treatment for structured products and infrastructure investments under its Risk-Based Capital (RBC 2) Framework. The proposals seek to refine capital requirements by introducing differentiated risk charging approaches for infrastructure-related investments and structured products. Key recommendations include eliminating the option for insurers to apply a flat 50% risk charge on structured products, recognizing credit ratings assigned to securitized assets, and applying targeted risk adjustments based on the nature and credit quality of the underlying assets. The MAS also proposes more favourable treatment for long-term infrastructure investments, emphasizing risk mitigation, financial stability, and sustainability. Industry feedback is sought by November 22, 2024, as MAS aims to align its framework with international standards while promoting sustainable investments. | ||
Investment | European Union | European Union | The European Parliament approved amendments to Directive 2014/65/EU (MiFID II), marking the first reading of proposed changes aimed at enhancing transparency, investor protection, and market integrity within the European financial markets. The amendments, outlined in Directive (EU) 2024/790, were part of a legislative process involving collaboration between Parliament, the Council, and the European Commission. These revisions to MiFID II are intended to adapt the regulatory framework to evolving market dynamics, with particular attention to the integration of technological advancements and sustainability considerations in financial services. The final version of the amended directive is expected to further streamline processes for market participants and strengthen oversight mechanisms. | |
European Union | European Union | The European Parliament has adopted amendments to Regulation (EU) No 600/2014 (MiFIR), which focus on enhancing transparency in market data, promoting the creation of a consolidated tape for financial instruments, and improving the efficiency of trading obligations. The regulation also introduces a ban on receiving payments for forwarding client orders (Payment for Order Flow – PFOF). The changes, formalized in Regulation (EU) 2024/791, aim to address existing barriers to data transparency, optimize market functioning, and ensure fairer practices in financial markets across the EU. These amendments are expected to enhance investor protection and promote a more integrated European capital market. |
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