In Week 44, global regulatory updates introduced new requirements across the financial sector, affecting practices in banking, investment, insurance, and derivatives reporting. This week’s roundup highlights critical changes to risk oversight, reporting standards, capital requirements, and transparency obligations. With these developments, financial institutions must adapt their compliance frameworks to meet the latest mandates and ensure robust operational standards amidst shifting regulatory expectations.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | China | NPC.GOV | The 11th session of the 14th National People’s Congress Standing Committee conducted a second review of the draft amendment to China’s Anti-Money Laundering (AML) Law, focusing on balancing AML efforts with safeguarding individuals’ financial activities and personal data privacy. Responding to public feedback, the amendment introduces several key revisions: (1) AML measures must be proportional to money laundering risks, ensuring uninterrupted financial services, (2) simplified customer due diligence for low-risk clients, (3) restrictions on excessive AML measures, and (4) streamlined procedures for disputing AML actions. Additionally, provisions now bolster data security, mandating financial institutions to handle AML information responsibly, protect personal privacy, and regulate intra-group AML data sharing under legal safeguards. | |
European Union | EBA | Enhanced Regulatory Guidance on Principal Adverse Impact (PAI) Disclosures under SFDR | In their 2024 report, the European Supervisory Authorities (ESAs) provide an annual review of Principal Adverse Impact (PAI) disclosures, addressing compliance and best practices among Financial Market Participants (FMPs). Covering disclosures as of June 30, 2023, for the 2022 reporting period, the report identifies both progress and persistent gaps. Larger FMPs generally showed higher compliance, benefitting from group-level support, while smaller entities often struggled with data and clarity issues. The ESAs highlight improvements in transparency and disclosure accessibility but call for greater consistency in data presentation and adherence to international sustainability standards. Notably, the ESAs recommend further guidance for FMPs on integrating climate-related disclosures, with an emphasis on alignment with the Paris Agreement and specific reporting metrics to enhance comparability across disclosures. | |
European Union | EBA | New Technical Standards for European Single Access Point (ESAP) Implementation | The European Supervisory Authorities (ESAs) released the Final Report on Implementing Technical Standards (ITS) for the European Single Access Point (ESAP), aimed at centralizing access to key financial and sustainability information. As mandated by Regulation (EU) 2023/2859, the ESAP will streamline access to data on financial services, sustainability, and capital markets, set to launch in 2026. The report clarifies tasks for data collection bodies, including automated validations, metadata requirements, and standards for machine-readable data, promoting uniformity across EU nations. The ESAP functionalities will ensure free public access, with support for data search and download, aligning with Europe’s goals for transparency and data accessibility. | |
Gibraltar | GFSC | The GFSC has issued updated guidance defining the scope of the Distributed Ledger Technology (DLT) Framework, which regulates DLT Providers under the Financial Services Act 2019 and DLT Regulations 2020. The guidance clarifies that entities conducting business involving the storage or transmission of value on behalf of others using DLT must be authorized as DLT Providers. Key regulated activities include custodial wallets, DLT-based exchanges, and DLT-powered lending platforms. The GFSC’s principles-based approach supports innovation while safeguarding against financial crime, aligning with FATF standards on virtual asset services. | ||
Italy | BancadItalia | The Bank of Italy has published a detailed study analyzing the potential transformations in the EU’s payment services regulatory framework amid the ongoing revision of the Payment Services Directive (PSD2). This revision, spurred by proposals for PSD3 and a new Payment Services Regulation (PSR), addresses how new entrants, including technical service providers and digital wallet providers, might fall under an expanded regulatory scope. Additionally, the study evaluates PSD2’s alignment with the Markets in Crypto-Assets Regulation (MiCAR), especially concerning electronic money tokens (EMTs) and asset-referenced tokens (ARTs) that might serve payment functions. These regulatory shifts aim to enhance consumer protection, transparency, and security, potentially revolutionizing EU payment services through tighter integration with the growing crypto-asset markets. | ||
Malaysia | BNM | Climate Risk Stress Testing (CRST) Exercise for Financial Institutions | Bank Negara Malaysia has initiated the 2024 Climate Risk Stress Testing (CRST) exercise, targeting licensed banks, insurers, takaful operators, and development financial institutions. This exercise mandates financial institutions to assess climate-related risks under three long-term climate scenarios, including a Net Zero 2050 pathway, and a short-term acute flood risk scenario reflecting a 1-in-200-year flood event. The primary goal is to build resilience by evaluating financial vulnerabilities linked to physical and transition risks, with stress tests spanning up to 2050. Results, due by June or December 2025, will inform strategies to address the sector’s exposure to climate change. | |
Malta | MFSA | The Malta Financial Services Authority (MFSA) has released a consultation document proposing updates to the Company Service Providers (CSP) framework to improve regulatory oversight and mitigate money laundering and terrorism financing risks. Key proposals include the introduction of a Notification Requirement for individuals with limited involvements and a Registration Requirement for those acting “by way of business” in up to 10 companies. Additionally, the MFSA proposes increasing the involvement threshold for Class B Under Threshold CSPs from 10 to 20 companies. Stakeholders are invited to provide feedback by November 15, 2024. | ||
Singapore | MAS | Updates FAQs on Derivatives Reporting under SFA for Enhanced Transparency | the Monetary Authority of Singapore (MAS) released updated FAQs on derivatives reporting requirements under the Securities and Futures Act (SFA), specifically for over the counter (OTC) derivatives. Key updates clarify reporting obligations, including scope, exemptions, and reportable information, especially for significant derivatives holders (SDH) and specified persons under the updated Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013. MAS emphasizes timely and accurate reporting of lifecycle events, valuation updates, and cross-border considerations, improving transparency in Singapore’s OTC derivatives market. | |
Slovakia | Data Protection | Guidelines on Processing Personal Data Based on Legitimate Interest | The European Data Protection Board (EDPB) has adopted new guidelines clarifying the processing of personal data based on “legitimate interest” under Article 6(1)(f) GDPR. The guidelines emphasize that personal data processing must meet three conditions: a legitimate interest by the controller, necessity of data processing for this interest, and ensuring that data subjects’ rights and freedoms are not outweighed by the legitimate interest. The guidance includes examples, outlines assessment criteria, and highlights specific contexts like fraud prevention, direct marketing, and information security. It underscores the need for thorough documentation of the balancing process to ensure compliance with GDPR obligations. | |
UAE | ADGM | The Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority (FSRA) has released Consultation Paper No. 9 of 2024, proposing regulatory framework enhancements. This initiative aligns ADGM’s regulations with updated international standards, including Basel Committee principles. Key updates involve strengthening corporate governance for banks, defining Domestic Systemically Important Banks (D-SIBs), and enhancing guidelines on stress testing, country risk, and connected counterparty criteria. These proposals aim to refine risk management and regulatory oversight within ADGM’s financial ecosystem. Stakeholders are invited to provide feedback by November 28, 2024. | ||
United Kingdom | BOE | Prudential Assessment Guidelines for Acquisitions and Control Increases | The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have jointly published PS18/24, effective November 1, 2024, detailing the prudential assessment for acquisitions and control increases in authorized firms. The statement provides updated guidance, particularly for private equity structures and limited partnerships, clarifying criteria for “significant influence” in determining controllers. Modifications include guidance on pre-notification engagement for high-risk transactions and expanded scenarios for identifying controllers in complex structures. The changes aim to streamline the assessment process and ensure compliance with FSMA standards for financial stability and oversight. | |
United Kingdom | BOE | Final OCP Policy Statement PS17/24 on Prudential Rule Changes | The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have published Policy Statement PS17/24, responding to feedback on Consultation Paper CP6/24 regarding updates to the Disclosure, Reporting, and Policyholder Protection parts of the PRA Rulebook. Effective November 4, 2024, the statement includes amendments addressing FSCS eligibility for occupational pension scheme members and minor adjustments to clarify UK EMIR margin requirements for financial firms. The updates aim to enhance clarity in compliance obligations without imposing significant new requirements. | |
United Kingdom | GOV.UK | UK Statutory Instruments | The Financial Services and Markets Act 2023 (Commencement No. 8) Regulations 2024 | The UK Treasury has enacted the Financial Services and Markets Act 2023 (Commencement No. 8) Regulations, effective from October 28, 2024. This statutory instrument initiates specific provisions of the Act, including the revocation of certain EU regulations and amendments to the Markets in Financial Instruments Regulation (MiFIR), giving the FCA enhanced rule-making powers. Key provisions will phase in through July 2026, impacting transparency, disclosure, and position limits in financial markets. The regulation aims to solidify the UK’s post-Brexit financial regulatory framework by replacing EU standards with UK-specific rules. | |
Banking | China | NFRA | Guidelines for Advanced Capital Measurement Methods in Commercial Banks | The NFRA has released new regulations on commercial banks’ application and acceptance processes for advanced capital measurement methods, aiming to enhance risk management and regulatory oversight. These guidelines outline requirements for banks to adopt internal models for measuring credit and market risks, ensuring accurate risk-weighted assets calculations. Banks must meet rigorous governance, data quality, and operational standards, with stepwise approval for implementing advanced methods. The NFRA will continuously supervise adherence, mandating comprehensive self-assessments, audits, and data reporting to maintain compliance and improve risk resilience. |
China | PBoC | Notice on Accounting Standards for Treasury-Related Operations by Commercial Banks and Credit Unions | The People’s Bank of China (PBoC) has issued Notice No. 196 [2024] on accounting standards for treasury-related operations conducted by commercial banks and credit unions, effective December 1, 2024. This directive standardizes the use of accounting subjects for activities such as managing treasury cash flow, government bond issuance, and centralized treasury payments. Banks and credit unions acting as treasury agents must adjust their accounting structures within six months, introducing specific categories for government budget and off-budget funds, categorized by level of government and specific budget items. The PBoC will oversee the implementation to ensure consistency and regulatory compliance. | |
Luxembourg | CSSF | Implementation of EBA Guidelines on Historical Data Resubmission | The Luxembourg CSSF has adopted the European Banking Authority (EBA) Guidelines (EBA/GL/2024/04) on resubmitting historical data under the EBA reporting framework. These guidelines require supervised entities to resubmit corrected data if errors or inaccuracies are identified, particularly where past reporting data affects critical compliance requirements. This approach ensures data integrity for supervisory and resolution reporting, promoting consistency across the EU and aligning with the EBA’s focus on high-quality financial data submissions. | |
France | ACPR | Amendment to Prudential Affairs Advisory Commission Membership | On October 21, 2024, the ACPR President modified Decision No. 2024-C-10 concerning the establishment of the Prudential Affairs Advisory Commission, revising Annex 3 to update commission members. This decision, which designates specific individuals from various financial institutions—such as Crédit Agricole, Société Générale, and BNP Paribas—to the advisory commission, underscores ongoing oversight and governance in the banking sector. The updated membership list, focusing on banking industry representation, will be published in the ACPR’s official registry. | |
South Africa | Reserve Bank | Proposed Directive on Capital Adequacy Reporting (Form BA 700) | The South African Prudential Authority (PA) has released a proposed directive for banks, foreign institution branches, and controlling companies regarding updates to the BA 700 form for capital adequacy and leverage reporting. Effective July 1, 2025, this directive provides standardized instructions for BA 700 completion, ensuring consistent reporting on risk-based capital requirements, leverage ratios, and associated buffers. Monthly solo and quarterly group submissions are required under the amended Regulations, with refinements to derivatives exposure and off-balance sheet items to enhance regulatory alignment. | |
Insurance | India | IRDAI | Unified Regulations for Data Maintenance and Information Sharing by Insurers | The Insurance Regulatory and Development Authority of India (IRDAI) has released an exposure draft for the Maintenance of Information by Regulated Entities and Sharing of Information by the Authority Regulations, 2024. This regulation consolidates and updates prior guidelines on record-keeping, inspection, and confidentiality. It mandates insurers to maintain essential data electronically, comply with data governance standards, and protect data confidentiality while allowing regulated information sharing. Stakeholders are invited to submit feedback by November 20, 2024. |
Japan | JFSA | Draft Amendment to Insurance Business Act for Economic Value-Based Solvency Regulation | The Financial Services Agency (FSA) of Japan has published a draft amendment to the Insurance Business Act Enforcement Regulations, aligning solvency regulations with an economic value-based approach. Set to take effect in FY 2025, the regulation introduces market-consistent valuation methods for insurers, including adjustments to risk reserves and disclosure requirements. This amendment excludes provisions for integrating overseas subsidiaries due to pending international capital standards. Stakeholders can submit feedback until December 2, 2024. | |
Romania | ASF Romania | Amendments to Reporting Requirements for Insurers and Reinsurers | The Romanian Financial Supervisory Authority (ASF) issued a draft amendment to reporting standards for insurance and reinsurance companies. This proposal mandates electronic submission of periodic quantitative reports, including technical reserves and solvency requirements, through the ASF-EWS platform. Additionally, it incorporates EU standards, requiring consistency with Solvency II guidelines and aligning audit submission deadlines. These changes aim to streamline reporting and enhance regulatory oversight in the insurance sector. | |
United Kingdom | GOV.UK | UK Statutory Instruments | Amendments to Prudential Requirements for Insurers and Reinsurers | The UK Treasury has enacted the Insurance and Reinsurance Undertakings (Prudential Requirements) (Amendment and Miscellaneous Provisions) Regulations 2024 which is effective from 31 December 2024. This legislation updates risk margin calculations, specifying a 4% cost-of-capital rate for capital held by insurers and reinsurers to manage liability transfers. It also includes transitional arrangements for Gibraltar entities, maintaining Solvency II compliance. Further amendments to the Companies Act 2006 and other legislation facilitate reporting, confidentiality, and alignment with the Financial Services and Markets Act 2023. | |
Investment | European Union | ESMA | Consultation on Technical Advice for Listing Act Implementation in Prospectus Regulation | ESMA issued a consultation paper seeking input on proposed technical advice regarding the EU Prospectus Regulation and updates to the Commission Delegated Regulation (CDR) on metadata. Key areas include standardizing prospectus formats, enhancing ESG disclosure for non-equity securities, and defining scrutiny criteria for NCAs. The consultation aims to streamline listing requirements for EU companies, particularly SMEs, while ensuring investor protection and sustainability alignment. Stakeholders are invited to submit feedback by December 31, 2024. |
European Union | ESMA | Consults on Amendments to MiFID II Research Provisions under the Listing Act | The European Securities and Markets Authority (ESMA) has released a consultation paper on proposed changes to MiFID II’s research payment provisions, aligning with the EU Listing Act. The proposal introduces flexibility for investment firms to pay jointly for execution and research services across all issuer capitalizations, with safeguards to avoid inducement risks. Key amendments include mandatory annual quality assessments for research and new requirements for firms using joint payment methods to ensure best execution and fair client cost allocation. ESMA is accepting feedback until January 28, 2025, with final recommendations expected by Q2 2025. | |
European Union | European Union | EU Defers Application of Market Risk Capital Requirements to 2026 | The European Commission has adopted Delegated Regulation (EU) 2024/2795, amending Regulation (EU) No 575/2013 to defer by one year the implementation of market risk capital requirements under the Fundamental Review of the Trading Book (FRTB). The delay, now effective from January 1, 2026, aligns EU timelines with global standards, maintaining competitive parity. Until then, institutions must continue reporting market risk exposure and capital requirements using pre-FRTB approaches. This postponement also extends specific FRTB disclosure obligations to preserve market discipline. | |
European Union | European Union | Directive on Concentration and Counterparty Risk for Centrally Cleared Derivatives | The EU Council has approved the European Parliament’s first-reading position on a directive amending Directives 2009/65/EU, 2013/36/EU, and (EU) 2019/2034. This directive strengthens the management of concentration and counterparty risks in derivatives transactions cleared through central counterparties (CCPs). Key amendments introduce enhanced risk monitoring and reporting for exposures to systemically important third-country CCPs and require institutions to develop specific risk management plans. The directive aims to mitigate contagion risks and bolster stability within the EU financial system. | |
European Union | European Union | Oversight and Risk Management for Third-Country Central Counterparties (CCPs) | The Council of the European Union has introduced amendments to strengthen the EU regulatory framework surrounding third-country central counterparties (CCPs), as part of legislative document 14730/24. These changes affect Regulations (EU) No 648/2012, No 575/2013, and No 2017/1131, focusing on reducing excessive exposure to non-EU CCPs and enhancing market efficiency within the Union. Key measures include heightened risk mitigation protocols, increased reporting obligations, and an “active account” requirement, mandating that significant derivatives be cleared within EU-based CCPs. The European Securities and Markets Authority (ESMA) will gain expanded authority to monitor and intervene in CCP activities, particularly in emergencies or cross-border scenarios. These amendments also set phased compliance timelines, allowing CCPs and market participants to adjust to the enhanced transparency and stability requirements. The reforms underline the EU’s commitment to consolidating oversight over clearing activities and reducing systemic reliance on third-country CCPs, thereby bolstering financial stability across the Union. | |
European Union | EBA | The European Banking Authority (EBA), in collaboration with ESMA and EIOPA, has launched a survey aimed at entities subject to the initial margin (IM) exchange requirements under EMIR 3. This survey targets financial institutions with an aggregate average notional amount (AANA) over €8 billion, using at least one IM model. Responses will aid the EBA in establishing a central validation function and informing a possible Delegated Act on fees. The survey covers IM model usage, licensing arrangements, and outsourcing practices, with a submission deadline of November 29, 2024. | ||
New Zealand | FMA | Consultation on Renewing Reporting Exemption for DIMS Licensees | The Financial Markets Authority (FMA) in New Zealand has initiated a consultation on renewing a class exemption that relieves certain Discretionary Investment Management Services (DIMS) licensees from specific financial reporting requirements. This exemption, applicable to small and medium-sized DIMS providers with under $250 million in retail funds under management, waives select financial and audit obligations. The FMA invites feedback on the exemption’s relevance, effectiveness, and potential adjustments before the November 29, 2024, deadline. | |
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