In this weekly roundup, we explore recent regulatory updates spanning financial markets, insurance, data privacy, risk management, and reinsurance. Covering critical changes across global jurisdictions, this blog highlights newly proposed guidelines, consultation papers, and regulatory amendments introduced to enhance transparency, investor protection, and market resilience. These updates underscore the evolving regulatory landscape, which continually adapts to meet industry challenges from digital transformation to sustainability and cross-border compliance.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | Australia | ASIC | The Australian Securities and Investments Commission (ASIC) has issued Consultation Paper CP 380 to gather feedback on new sustainability reporting requirements under the Corporations Act. These requirements mandate certain entities to produce annual sustainability reports, focusing on climate-related financial disclosures. Key proposals include guidance on report preparation, relief for stapled entities, and clarifications on sustainability record-keeping and directors’ duties. ASIC also seeks input on broader issues to refine the approach, aiming to enhance the quality, comparability, and transparency of sustainability data for stakeholders. Public comments are due by December 19, 2024, and ASIC’s regulatory guide is expected in Q1 2025. | |
European Union | European Union | The European Parliament has adopted Regulation (EU) 2024/2747 to establish a robust framework addressing internal market emergencies. This regulation introduces measures aimed at maintaining the free movement of goods, services, and people across the EU during crises, such as supply chain disruptions or public health emergencies, which can lead to divergent national responses. The framework mandates cooperation among member states, includes a vigilance mode to pre-empt crises, and sets emergency protocols for managing supply chain disruptions. Key provisions include creating an Internal Market Emergency and Resilience Board and implementing streamlined procedures for swift response, such as priority-rated requests to critical sectors. This regulation is expected to bolster EU resilience and safeguard cross-border trade and essential services during unforeseen crises. | ||
European Union | European Union | The EU Parliament and Council has adopted a new regulation to enhance transparency and ensure integrity in Environmental, Social, and Governance (ESG) rating activities. This legislation mandates comprehensive disclosures and governance standards for ESG rating providers operating within the EU. Key requirements include the adoption of rigorous methodologies, conflict-of-interest safeguards, and transparency about the data and processes used in ratings. The European Securities and Markets Authority (ESMA) is tasked with supervising compliance and managing authorizations. This regulation aims to improve ESG ratings’ reliability, foster investor confidence, and support the EU’s sustainable finance goals aligned with the European Green Deal and the Sustainable Development Goals. | ||
European Union | EIOPA | Joint Guidelines for ESAs and Competent Authorities Under DORA | The European Supervisory Authorities (ESAs) have issued comprehensive guidelines for oversight cooperation and information exchange under the Digital Operational Resilience Act (DORA). These guidelines define procedures for the ESAs and competent authorities to share information, particularly concerning critical ICT third-party service providers, and ensure consistent approaches across the EU. Key provisions include language standards, secure communication protocols, timelines for information exchanges, and conflict resolution mechanisms. Additionally, the guidelines establish the responsibilities of the Lead Overseer and detail processes for criticality assessments, oversight planning, and incident reporting. Effective from January 17, 2025, these guidelines aim to reinforce digital resilience in the financial sector by coordinating regulatory efforts across jurisdictions. | |
European Union | ESMA | The European Securities and Markets Authority (ESMA) released a compliance table in November 2024 summarizing the adherence of various national competent authorities to its guidelines on non-significant benchmarks. This table reveals which authorities comply, or intend to comply, with ESMA’s benchmark guidelines, established to ensure transparency and reliability in the oversight of smaller benchmarks. Authorities across EU member states and select EEA countries like Iceland, Liechtenstein, and Norway have committed to compliance, reinforcing a consistent regulatory approach within the EU’s financial market. This guideline seeks to mitigate risks related to the integrity of non-significant benchmarks, which, while smaller in scale, remain crucial to market stability and investor confidence. | ||
European Union | EDPB | Review of the EU-U.S. Data Privacy Framework and Recommendations on Law Enforcement Data Access | The European Data Protection Board (EDPB) has released its first report on the EU-U.S. Data Privacy Framework (DPF), highlighting progress and areas for improvement in data protection between the EU and U.S. The EDPB commended the U.S. Department of Commerce for implementing certification processes, compliance promotion, and redress mechanisms for EU individuals, while urging proactive monitoring of DPF-certified companies. For public authority access to EU data, the EDPB stressed the importance of safeguards, such as necessity and proportionality, as outlined in U.S. Executive Order 14086, and recommended continuous EU oversight. Additionally, the EDPB issued a statement on the high-level group’s (HLG) recommendations for law enforcement data access, cautioning that broad data retention mandates and weakened encryption could infringe on fundamental rights. The Board calls for careful consideration to ensure data protection aligns with privacy rights and EU legal standards. | |
European Union | AFME | The Association for Financial Markets in Europe (AFME) has submitted a vision for leveraging Distributed Ledger Technology (DLT) in EU financial markets. AFME’s recommendations focus on developing a “Technology Financial Infrastructure” (TFI) to support a tokenized economy, which would link real-world assets to capital markets and streamline processes such as issuance, settlement, and record-keeping. AFME proposes both short-term “quick fixes” to the current DLT Pilot Regime, including easing authorization requirements for DLT Settlement Systems and raising transaction thresholds, and long-term regulatory changes to adapt EU laws for widespread DLT integration. The goal is to enhance the EU’s competitiveness in DLT and maintain its leadership in financial innovation, fostering economic growth, accessibility, and resilience within the EU’s capital markets. | ||
Luxembourg | CSSF | FATF’s Proposed Revisions on AML/CFT Standards to Enhance Financial Inclusion | The Financial Action Task Force (FATF) is inviting public feedback on proposed updates to its Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) standards, with a focus on promoting financial inclusion. The revisions target Recommendations 1, 10, and 15, aiming to clarify and apply a proportional approach to risk. Key changes include replacing “commensurate” with “proportionate” to better align with financial inclusion objectives, encouraging simplified measures for lower-risk situations, and adjusting non-face-to-face transaction guidelines to recognize advancements in digital identity verification. FATF is particularly interested in feedback on the practical impact of these changes on risk mitigation practices and compliance. Responses are requested by December 6, 2024. | |
Malaysia | BNM | Bank Negara Malaysia (BNM) released a new Exposure Draft on Risk Management in Technology (RMiT) dated November 7, 2024, outlining enhanced technology risk management expectations for financial institutions. This draft specifies requirements aimed at strengthening cyber resilience, operational reliability, and customer protection. The proposed policy emphasizes rigorous governance, technology risk management, cybersecurity, and operational measures to mitigate threats in an evolving digital landscape. BNM invites public comments on specific questions related to the draft’s requirements, including feedback on timelines, investment needs, and operational impact for compliance. Responses are due by January 31, 2025. | ||
Nigeria | FRC | Exposure Draft on Valuation Regulations for Financial Reporting | The Financial Reporting Council (FRC) of Nigeria has issued an Exposure Draft for Valuation Regulations for Financial Reporting 2024, designed to establish a regulatory framework for valuers conducting financial reporting valuations. The draft sets out standards for registration, conduct, and monitoring of valuers, specifying requirements to ensure objectivity, data integrity, and compliance with valuation standards. Notable provisions include a 10-year tenure limit for valuers of Public Interest Entities (PIEs), conflict-of-interest safeguards, and mandatory disclosures in valuation reports. Additionally, an enforcement committee and quality review team are established to oversee compliance and address breaches. Comments on the draft are invited until December 3, 2024, with the regulation expected to take effect on January 1, 2026. | |
United Kingdom | GOV.UK | UK Statutory Instruments | Financial Services and Markets Act 2023: Consequential Amendments 2024 | The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024, effective from December 1, 2024, introduces several updates to UK financial regulations to align with the 2023 Act. Key amendments include adjustments to EU Regulation 600/2014 (MiFIR), the Bank Recovery and Resolution Order 2014, Commission Delegated Regulation 2017/567, and the Financial Services and Markets Act 2000 (MiFID II Regulations). These changes enhance the Financial Conduct Authority’s (FCA) authority, especially in areas concerning transparency and systematic internalisers. Additionally, the amendments update terminology, expand regulatory powers, and adjust definitions to solidify UK-specific governance in financial services, reflecting post-Brexit regulatory independence. | |
United States | California | CPPA | The California Privacy Protection Agency (CPPA) has adopted regulations clarifying data broker registration under the Delete Act, while advancing a broader rulemaking package that includes insurance, cybersecurity audits, risk assessments, and automated decision-making technology (ADMT). The data broker regulations, pending approval from the Office of Administrative Law, aim to enhance transparency by defining key terms, clarifying registration protocols, and detailing disclosure requirements for exempt data. The proposed ADMT and cybersecurity rules will enter a 45-day public comment period, addressing consumer rights in ADMT usage and mandating cybersecurity audits and risk assessments for specific businesses. This move aligns with CPPA’s mission to protect privacy as technology evolves rapidly, according to Executive Director Ashkan Soltani. If approved, these measures will significantly expand California’s privacy regulations, taking effect January 1, 2025. | ||
Banking | Chile | CMF | Public Consultation on Enhanced Capital Requirements for Banks under Basel III | Chile’s Financial Market Commission (CMF) has initiated a public consultation on revised regulations for additional capital requirements as part of Basel III’s Pillar 2 framework. Following feedback on a prior version of these adjustments, the new proposal refines Chapter 21-13 of CMF’s standards, aiming to improve supervision and clarify aspects of capital adequacy assessments. The proposal includes enhancements to market risk assessments, adjustments to internal capital targets, and refinements to Annexes related to risk modelling and reporting formats. Key provisions, including adjustments for banks’ interest rate risks and equity requirements, will begin to apply in 2025, with further steps phased in by 2027. This regulatory update is part of CMF’s ongoing Basel III implementation efforts, aimed at addressing non-traditional risks such as cybersecurity and climate risk beyond traditional credit and market risks. |
Chile | CMF | Proposed Regulation for Exceptional Return of Participation Shares in Credit Cooperatives | On September 11, 2024, Chile’s Financial Market Commission (CMF) launched a public consultation on a proposed regulation that allows credit cooperatives to return participation shares to members under exceptional conditions, as outlined in the newly amended General Law of Cooperatives (LGC). This regulation, part of the CMF’s Updated Compilation of Standards (RAN), specifies that cooperatives may only request these returns if they meet strict solvency requirements, including a solvency index above 21% and no losses in the previous year. The proposal also includes updates to the Accounting Standards Compendium to enhance the financial information presented by cooperatives. This initiative stems from the 2023 Financial Resilience Law, aimed at strengthening financial infrastructure and cooperatives’ stability. The consultation period ended on October 11, 2024 | |
Hong Kong | HKMA | The Hong Kong Monetary Authority (HKMA) released a revised version of its Supervisory Review Process (SRP) guidelines under the Supervisory Policy Manual, enhancing its approach to capital adequacy assessments as required under Basel III’s Pillar 2. This update refines the SRP’s framework, including assessments of banks’ internal capital adequacy, risk management, and stress-testing capabilities. Key changes emphasize the differentiation between capital requirements for unexpected risks (P2A) and a resilience buffer (P2B), along with stronger requirements for banks to manage risks related to credit, market, operational, and liquidity aspects. Effective January 1, 2025, these guidelines aim to ensure that authorized institutions maintain robust capital levels, promote transparency, and align risk management practices with global standards. | ||
United Kingdom | FCA | On November 4, 2024, the Financial Conduct Authority (FCA) issued guidance for mortgage lenders to support existing borrowers facing increased mortgage payments amid rising living costs. This guidance offers firms flexibility in providing forbearance, enabling contract variations like temporary shifts to interest-only payments, term extensions, and capital repayment reductions without stringent affordability assessments. Firms are encouraged to use digital tools for scalable support, ensuring options are tailored to individual circumstances while also accommodating vulnerable customers through non-digital channels. The guidance aligns with recent FCA rule changes, reinforcing fair treatment and transparency to help borrowers manage financial challenges | ||
Insurance | Australia | APRA | Consultation on Adjustments to General Insurance Reinsurance Requirements | The Australian Prudential Regulation Authority (APRA) has initiated a consultation on potential adjustments to its general insurance reinsurance framework. These changes are aimed at enhancing insurers’ access to alternative reinsurance options amid global reinsurance market challenges, driven by factors like climate-related losses and geopolitical risks. Proposed modifications include relaxing requirements for the “all perils” coverage, lowering the reinstatement requirement from a 1-in-200-year event to a 1-in-100-year event, and removing the need to hold capital against reinstatement premiums. APRA is also suggesting technical updates, such as clarifying catastrophe modelling for non-modelled risks and refining the framework to reduce regulatory burden. Stakeholders are invited to provide feedback by February 17, 2025, with further consultations planned for 2025 and potential implementation by mid-2026 |
Canada | IBC | Stricter Reinsurance Rules for Dutch Insurers with Non-EU Contracts | From January 1, 2025, Dutch insurers must obtain prior approval from the Dutch Central Bank (DNB) before entering or amending reinsurance contracts that involve transferring assets to non-EU countries. This regulatory change, driven by the Dutch Financial Markets (Amendment) Act 2024, mandates DNB’s oversight to ensure compliance with the “prudent person principle” under the Solvency II Directive. The DNB will evaluate reinsurance structures to confirm that insurers’ claims on reinsurers are secure, even in insolvency scenarios. Insurers must provide detailed documentation, including risk assessments and asset valuations, through DNB’s platform. A draft Q&A, currently under consultation, offers further guidance, emphasizing a “proportional approach” for non-material contracts, potentially reducing administrative burdens. This change aims to bolster financial stability while ensuring asset protection for insurers dealing with non-EU reinsurers | |
European Union | EIOPA | Consultation on Risk Mitigation in Reinsurance for Mass Lapse Events | The European Insurance and Occupational Pensions Authority (EIOPA) has launched a consultation on risk mitigation techniques (RMT) for insurance companies, specifically addressing mass-lapse reinsurance and termination clauses in reinsurance agreements. This consultation seeks to refine the application of RMTs in cases where significant policy lapses could impact insurers’ solvency. Proposed guidelines emphasize alignment with Solvency II standards, including a comprehensive assessment of multi-year mass-lapse risks, appropriate measurement periods, and the avoidance of termination clauses that could undermine risk transfer. Feedback is open until February 7, 2025, to guide finalizing RMT standards, which aim to ensure effective risk mitigation across diverse reinsurance structures and scenarios | |
European Union | EIOPA | On November 7, 2024, the European Insurance and Occupational Pensions Authority (EIOPA) published a comprehensive report on integrating sustainability risks within the prudential framework under Solvency II. The report focuses on assessing the prudential treatment of assets with high exposure to environmental and social risks, particularly concerning climate transition and social objectives. Key proposals include adjusting capital requirements for high-risk sectors like fossil fuels, exploring climate adaptation in non-life insurance underwriting, and highlighting social risks that could impact financial stability. EIOPA’s forward-looking approach combines both quantitative and qualitative analyses to align capital requirements with the evolving landscape of sustainability-related risks | ||
European Union | European Council | Amendments to Solvency II and Introduces IRRD for Insurance Sector Resilience | The European Council has approved amendments to the Solvency II directive and introduced a new Insurance Recovery and Resolution Directive (IRRD), both aimed at strengthening the insurance sector’s role in Europe’s economic growth and stability. The updated Solvency II rules enhance the sector’s capacity to provide long-term private investments, supporting capital market union and financing green and digital transitions, while improving sector resilience to protect policyholders. The IRRD establishes protocols for early intervention during significant financial distress, enabling cross-border cooperation among authorities to safeguard the economy and avoid taxpayer-funded bailouts. These directives will be published in the EU’s Official Journal, entering into force 20 days after publication, with implementation set for two years later. | |
India | IRDAI | The Insurance Regulatory and Development Authority of India (IRDAI) has issued an exposure draft proposing amendments to the Re-Insurance Advisory Committee (RAC) Regulations, initially established in 2019. Key changes aim to improve the committee’s operational efficiency, including empowering the Chairman to decide the meeting mode, time, and location. The draft also introduces provisions regarding the resignation and removal of RAC members, enhancing governance within the committee. Stakeholders are invited to submit feedback by November 26, 2024. These amendments intend to streamline the advisory process and strengthen regulatory oversight in India’s reinsurance sector. | ||
India | IRDAI | Amendments to Regulatory Sandbox Regulations for Insurance Innovation | The Insurance Regulatory and Development Authority of India (IRDAI) has issued an exposure draft proposing changes to the Regulatory Sandbox framework, which aims to foster innovation in India’s insurance sector. Key updates include a shift towards a principle-based approach, moving specifics like minimum net worth, fees, and eligibility criteria into a master circular to enhance flexibility. The draft also introduces provisions for an inter-regulatory sandbox, allowing cross-sectoral applications, and clarifies that prudential and financial stability issues will be excluded from sandbox trials. Stakeholders are invited to submit feedback by November 25, 2024, to guide the adoption of these amendments, which aim to streamline regulatory compliance and encourage beneficial innovations. | |
United Kingdom | GOV.UK | UK Statutory Instruments | New Overseas Insurance Regime and Amendments under Solvency II | The UK Treasury has introduced the “Insurance and Reinsurance Undertakings (Overseas Insurance Regime, Transitional Provisions, etc.) Regulations 2024,” effective from December 31, 2024. This regulatory framework, part of Solvency II adjustments, mandates the Prudential Regulation Authority (PRA) to treat reinsurance contracts with designated overseas jurisdictions equivalently to UK-based contracts. Additionally, it permits insurance groups with overseas entities to incorporate local jurisdictional laws in capital requirement calculations. The regulations aim to foster international competitiveness and enhance supervisory cooperation, designating countries like Bermuda, the EEA states, and Switzerland for streamlined oversight. Existing Solvency II permissions will transition seamlessly, ensuring continuity in regulatory compliance post-Brexit. | |
United Kingdom | GOV.UK | UK Statutory Instruments | Bonding Requirements for Insolvency Practitioners under New 2024 Regulations | Effective December 1, 2024, the UK’s “Insolvency Practitioners (Amendment and Transitional Provisions) Regulations 2024” introduces enhanced bonding requirements for insolvency practitioners. Key changes include a mandatory interest rate on losses caused by fraud or dishonesty, linked to the Sterling Overnight Index Average (SONIA), and an increased general penalty sum from £250,000 to £750,000. The regulations also set a minimum six-year indemnity period for claims and mandate coverage of successor practitioner costs for fraud investigation, legal advice, and estate administration. Transitional provisions allow existing bonds issued before January 2026 to comply with the previous requirements, ensuring continuity in practitioner oversight. | |
United Kingdom | FCA | FCA Reopens Consultation on Regulation of Commercial and Bespoke Insurance | The UK Financial Conduct Authority (FCA) has partially reopened its consultation on Discussion Paper DP24/1, initially released in July 2024, to seek further input on the regulation of commercial and bespoke insurance. This reopening allows stakeholders more time to provide detailed feedback on the proposed changes, including cost estimations for different regulatory options, data on outcomes for various commercial customers, and the financial impact of rules on co-manufactured and bespoke insurance products. The FCA also requests insights into the applicability of these rules to retail and pure protection products. Responses are due by January 10, 2025, with a focus on assessing the financial, operational, and customer impact across the commercial insurance market | |
Investment | European Union | European Union | EU Amends AIFMD and UCITSD to Strengthen Regulation of Alternative Investment Funds | On February 7, 2024, the European Parliament adopted amendments to the Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for Collective Investment in Transferable Securities Directive (UCITSD). These amendments aim to enhance the regulatory framework governing alternative investment funds by refining rules on delegation arrangements, liquidity risk management, supervisory reporting, depositary and custody services, and loan origination. Key changes include stricter delegation oversight, requiring investment managers to maintain better internal controls and accountability for third-party services, along with new measures to monitor and report liquidity risks. These revisions, outlined in Directive (EU) 2024/927, seek to protect investors and improve market stability across the EU, with provisions set to be implemented by member states following publication in the Official Journal. |
European Union | ESMA | Compliance Table for MiFID II Compliance Function Guidelines | The European Securities and Markets Authority (ESMA) has updated its compliance table on the MiFID II compliance function guidelines as of October 28, 2024. This table reports which national competent authorities across EU Member States and EEA countries comply with ESMA’s guidelines on the MiFID II compliance function. Most countries, including Belgium (FSMA), Germany (BaFin), and Spain (CNMV), confirmed full compliance, with some authorities, like Romania’s ASF, implementing partial compliance due to local restrictions on outsourcing the compliance function. The compliance efforts ensure that MiFID II standards on internal control, governance, and risk management are uniformly applied across member jurisdictions. | |
Japan | JFSA | New Guidelines for Venture Capital Practices to Boost Investment Ecosystem | On October 17, 2024, Japan’s Financial Services Agency (FSA) and Ministry of Economy, Trade and Industry (METI) finalized new guidelines for venture capital (VC) firms. These guidelines, the product of expert discussions initiated in April, outline recommendations and expectations for VC practices to attract increased funding from domestic and international institutional investors. Aimed at fostering a robust startup ecosystem, the guidelines emphasize governance, investor communication, and transparency, particularly for VCs managing long-term assets from institutional partners. The framework includes sections on fiduciary duty, conflict-of-interest management, sustainable operational structures, fair asset valuation, and fostering diversity and ESG in investment. The guidelines are voluntary, allowing flexibility in adoption according to each VC’s structure and investor base, with follow-up reviews planned to adapt to market changes | |
United Kingdom | FCA | The Financial Conduct Authority (FCA) has finalized PS24/14, outlining new transparency requirements for UK bond and derivatives markets. Following the Wholesale Markets Review, these rules recalibrate transparency obligations to improve price formation, align with international standards, and support market growth. Key changes include updated scope definitions for bond and derivative instruments subject to real-time and deferred reporting, adjustments to pre- and post-trade transparency waivers, and increased data fields for trade reporting. A phased implementation begins in December 2025, with a post-implementation review to assess efficacy. Stakeholders are encouraged to submit further comments by January 10, 2025. | ||
United Kingdom | FCA | Consultation on Investment research payment optionality for fund managers | The Financial Conduct Authority (FCA) has released Consultation Paper CP24/21 to gather industry feedback on a proposed payment flexibility framework for investment research in pooled funds. The paper explores extending joint payment options—previously available only to firms managing segregated mandates—to pooled funds managed by fund managers under the UCITS and AIFMD regimes. This proposal includes specific “guardrails” to ensure transparency, budget discipline, and fair cost allocation for research expenditures. Designed to increase operational efficiency and support smaller asset managers, the consultation addresses the need for global competitiveness in research procurement while maintaining MiFID II’s unbundling standards. Comments are invited until December 16, 2024. | |
United States | SEC | Documentation Rules for Private Fund Advisers Amid Court Ruling | The SEC has finalized rules under the Investment Advisers Act, enhancing transparency for investors in private funds. These rules require private fund advisers to disclose practices around fees, compensation, and potential conflicts of interest, targeting transparency in adviser-client relationships. However, in a significant legal development, the U.S. Court of Appeals for the Fifth Circuit vacated these new rules in the National Association of Private Fund Managers v. SEC decision. As a result, newly adopted requirements are currently vacated, along with certain amendments to pre-existing compliance rules, leaving prior standards in effect. This ruling underscore the ongoing judicial scrutiny over the SEC’s authority in regulating private fund advisers. | |
United States | SEC | On November 7, 2024, the Securities and Exchange Commission (SEC) issued Release No. 33-11325, implementing conforming amendments across multiple rules and forms under the Securities Act, the Exchange Act, the Investment Company Act, and the Investment Advisers Act. These amendments correct technical errors, update outdated references, and adjust for consistency in requirements, particularly for Form N-MFP, which affects money market funds, and rules around investment company advertisements. The final rule allows registrants a 90-day transition period to align their filings with the updated standards, aiming to improve regulatory clarity and efficiency without imposing substantial new compliance burdens. |
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