This week brought a series of vital regulatory updates across the financial and investment landscapes. From significant advancements in sustainability standards to enhancements in risk management frameworks, these changes reflect global efforts to address systemic risks, improve market transparency, and align with evolving economic priorities. Stakeholders, including institutions and regulators, are navigating these developments to foster resilience, compliance, and sustainable growth in increasingly complex financial ecosystems.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | Belgium | FSMA | FSMA Implements ESMA Guidelines on ESG Fund Naming to Combat Greenwashing | The Belgian Financial Services and Markets Authority (FSMA) announced the adoption of the European Securities and Markets Authority (ESMA) guidelines on fund names containing terms related to Environmental, Social, and Governance (ESG) or sustainability criteria. These guidelines, effective November 21, 2024, aim to ensure fund names accurately reflect their sustainability objectives, thereby mitigating the risk of greenwashing. Funds launched after this date must comply immediately, while existing funds have until May 21, 2025, to align. The guidelines include criteria for minimum investment thresholds, exclusions based on Climate Transition Benchmark (CTB) and Paris-Aligned Benchmark (PAB), and terms referencing social, governance, or environmental aspects. FSMA’s integration of these standards into its supervisory framework underscores its commitment to uniform regulatory practices across the European financial market. |
China | NPC.GOV | China Revises Anti-Money Laundering Law to Strengthen Financial Security | China’s newly revised Anti-Money Laundering (AML) Law, approved on November 8, 2024, by the Standing Committee of the 14th National People’s Congress, will take effect on January 1, 2025. The revision enhances AML measures, balancing crime prevention with the protection of individual and organizational rights. Key updates include expanded supervision, clarified obligations, and strengthened international cooperation. Comprising seven chapters and 65 articles, the revised law aligns with modern financial risks and ensures AML measures are proportional to laundering risks while maintaining seamless financial operations. This comprehensive overhaul aims to safeguard national security and uphold citizens’ legal rights in the evolving financial landscape. | |
European Union | EBA | Guidelines for Compliance with EU and National Restrictive Measures | The European Banking Authority (EBA) released two sets of guidelines on November 14, 2024, to standardize financial institutions’ approaches to implementing EU and national restrictive measures. The guidelines aim to address inconsistencies in supervisory practices across member states, which have posed legal and reputational risks for financial entities. The first guideline applies broadly to financial institutions, detailing governance and internal controls necessary for compliance. The second targets payment service providers (PSPs) and crypto-asset service providers (CASPs), emphasizing measures for fund and crypto-asset transfers. These frameworks promote effective compliance with financial sanctions and sectoral restrictions, aligning institutions’ procedures with EU legislation and enhancing the robustness of the financial system against risks like circumvention and greenwashing. Implementation starts on December 30, 2025. | |
European Union | European Union | The European Commission has published a notice providing clarity on sustainability reporting obligations under the Corporate Sustainability Reporting Directive (CSRD). This includes guidance on the interpretation of provisions in directives such as the Accounting Directive, Audit Directive, and Transparency Directive, along with sustainability reporting standards like ESRS and the Sustainable Finance Disclosures Regulation (SFDR). The guidance also addresses requirements for statutory auditors and assurance providers. The notice aims to reduce administrative burdens while ensuring the comparability and usability of reported sustainability information. Implementation guidance from EFRAG complements these clarifications, enabling businesses to better align with evolving EU sustainability reporting standards. | ||
Global | ISO | ESG Implementation Principles to Simplify Sustainability Practices | On November 14, 2024, the International Organization for Standardization (ISO) unveiled its ESG Implementation Principles during COP29. These guidelines aim to streamline Environmental, Social, and Governance (ESG) practices, offering organizations a standardized framework to enhance reporting consistency and comparability. Addressing global challenges such as climate change and social inequality, the principles provide actionable insights for entities of all sizes, including small businesses and NGOs. Developed with input from over 1,900 experts across 128 countries, they align with existing standards like the EU’s CSRD and the ISSB’s IFRS S1 and S2. The framework supports effective sustainability integration, enabling transparent communication of ESG efforts and fostering balanced growth. | |
Malta | MFSA | Legal Framework for Implementing EU’s Digital Operational Resilience Act (DORA) | The Malta Financial Services Authority (MFSA) has published the necessary legal measures to implement Regulation (EU) 2022/2554 on Digital Operational Resilience for the Financial Sector (DORA). Effective from January 17, 2025, DORA aims to fortify the operational resilience of financial institutions against digital risks. The MFSA has introduced two key regulations: the Digital Operational Resilience Act (DORA) Regulations, 2024, integrating DORA into Malta’s legal framework, and amendments to the Financial Markets Act and Investment Services Act to address data reporting requirements. Further details on the transposition of the DORA Amending Directive will follow. | |
Switzerland | FINMA | The Swiss Financial Market Supervisory Authority (FINMA) has transitioned Circular 2013/3 “Auditing” into a new Regulatory Auditing Ordinance and fully revised the associated circular. This update aligns auditing regulations with Article 7(1) of the Financial Market Supervision Act (FINMASA). The revision streamlines content, converting annexes on risk analysis and audit strategy into adaptable templates for greater flexibility. While the updates enhance procedural efficiency, they do not address broader regulatory auditing issues identified during the Credit Suisse crisis. FINMA invites comments on future template adjustments to ensure transparency and stakeholder engagement. | ||
United Kingdom | FCA | The Bank of England, Prudential Regulation Authority (PRA), and Financial Conduct Authority (FCA) have introduced a comprehensive oversight framework for critical third parties (CTPs) serving the UK financial sector. Published on November 12, 2024, this policy statement defines CTPs as service providers whose disruptions could threaten the financial system’s stability or confidence. The regime mandates strict operational risk and resilience requirements, including governance, incident management, and supply chain oversight. Additionally, CTPs must comply with incident reporting and scenario testing protocols to mitigate systemic risks. The oversight regime aligns with global standards while addressing UK-specific resilience challenges. Implementation begins January 2025. | ||
Banking | European Union | European Union | Amendments to SRM Regulation Enhance Resolution Framework for Credit Institutions | The Single Resolution Mechanism (SRM) Regulation, governing the resolution of credit institutions and investment firms in the EU, has been updated as of November 14, 2024. The amendments aim to streamline resolution planning and execution, ensuring the protection of critical financial functions while minimizing risks to financial stability. Key changes include enhanced provisions for resolution planning, stricter requirements for loss-absorbing capacity, and improved cross-border cooperation within the Single Resolution Mechanism. These updates align with broader EU regulatory reforms, strengthening the resilience of the financial system and reinforcing the framework for orderly resolution without public financial support. |
European Union | European Union | Directive on Recovery and Resolution of Credit Institutions and Investment Firms | The European Union has revised Directive 2014/59/EU to strengthen the framework for the recovery and resolution of credit institutions and investment firms, aligning it with evolving financial stability needs. The amendments focus on enhancing cross-border cooperation, streamlining resolution planning, and clarifying criteria for resolvability assessments. New measures include stricter provisions for group-level recovery plans, more detailed requirements for resolution authorities, and enhanced safeguards to prevent financial instability during resolution processes. These updates aim to bolster the EU’s ability to manage financial crises effectively, protect taxpayers, and maintain market confidence. | |
European Union | European Union | ESRB Recommends Updates to Cross-Border Macroprudential Reciprocity Framework | The European Systemic Risk Board (ESRB) issued Recommendation ESRB/2024/5 on September 27, 2024, amending its 2015 framework on cross-border reciprocity for macroprudential policy measures. The update responds to Belgium’s recalibration of its sectoral systemic risk buffer (sSyRB) to 6% for residential real estate exposures, effective April 1, 2024. The ESRB recommends EU Member States reciprocate this measure on individual, sub-consolidated, and consolidated bases. An institution-specific materiality threshold of €2 billion applies, allowing exemptions for institutions with lesser exposures. This amendment aims to enhance consistency in addressing systemic risks and mitigate regulatory arbitrage across Member States. | |
European Union | EBA | Consultation on Proportionate Retail Diversification Guidelines | The European Banking Authority (EBA) has initiated a consultation on guidelines for proportionate retail diversification methods under Article 123(1) of the Capital Requirements Regulation (CRR). These guidelines aim to define criteria for identifying retail exposures that qualify for a preferential risk weight of 75% under the standardized approach for credit risk. Addressing the lack of uniformity in assessing diversification, the EBA proposes a method allowing institutions with less granular portfolios to remain eligible for the preferential risk weight. The guidelines introduce a diversification test, setting thresholds based on exposure concentration within a portfolio. Two approaches—iterative and non-iterative—are under consideration to ensure proportionate application and harmonization across the EU. The consultation is open for feedback until February 12, 2025, with implementation expected following finalization of the guidelines. | |
European Union | EBA | The European Banking Authority (EBA) has unveiled the methodology, draft templates, and milestone dates for the 2025 EU-wide stress test, set to begin in January 2025. This stress test will evaluate the impact of adverse macroeconomic scenarios on banks’ solvency, using a constrained bottom-up approach with top-down elements. Covering all major risk areas, it mandates projections of risk factors and income streams under baseline and adverse scenarios. Key milestones include initial submissions by April 2025, final submissions by July 2025, and result publication in August 2025. Adjustments in this exercise reflect industry feedback and new CRR3/CDR VI regulations. | ||
Hong Kong | HKMA | The Hong Kong Monetary Authority (HKMA) has issued a new Supervisory Policy Manual (SPM) module, MB-1, on “Risk-based Supervision of Approved Money Brokers” (AMBs). Effective November 15, 2024, the module codifies existing standards and requirements, including those from the Treasury Markets Association’s “Code of Conduct and Practice” and the Banking Ordinance’s Minimum Criteria for Approval. It elaborates on HKMA’s risk-based supervisory approach, emphasizing compliance and operational integrity within AMBs. The guidelines aim to enhance market stability and ensure adherence to statutory obligations. | ||
Luxembourg | CSSF | Long Form Report Requirements for Luxembourg Credit Institutions | The Commission de Surveillance du Secteur Financier (CSSF) has issued Circular CSSF 24/865, amending Circular 22/821 to align the Long Form Report (LFR) requirements with supervisory priorities. Updates include new sections on DORA preparedness and LCRDA Article 23(2) in the self-assessment questionnaire (SAQ) and minor modifications to existing sections. The LFR framework continues to require annual separate reports on the protection of client funds and AML/CFT compliance from statutory auditors. The revised circular applies to Luxembourg credit institutions and non-EU branches, taking effect on December 31, 2024. | |
Portugal | BDP | Banco de Portugal has launched Public Consultation No. 6/2024, seeking input on draft amendments to Notice No. 3/2020 and Instruction No. 18/2020. The proposals aim to enhance governance and internal control frameworks and refine reporting requirements for credit institutions and financial firms. The revisions align national regulations with evolving European standards and supervisory experiences, addressing industry needs while clarifying existing provisions. Public comments, limited to the scope of the proposed changes, are invited until December 31, 2024, via specified submission channels. Stakeholders are encouraged to provide targeted feedback to shape the regulatory updates effectively. | ||
Insurance | Global | UNEPFI | The United Nations Environment Programme’s Forum for Insurance Transition to Net Zero (FIT) has released its inaugural report, “Closing the Gap,” outlining global guidance for insurance companies to develop robust transition plans. The report emphasizes the insurance sector’s critical role in advancing a just and resilient net-zero economy through underwriting, investment, and operational strategies. It identifies gaps in current frameworks, particularly around underwriting portfolios, and proposes linking these with investment portfolios for a holistic transition approach. FIT’s recommendations align with global sustainability initiatives like ISSB, TCFD, and GFANZ, providing a foundation for insurers to address climate, biodiversity, and pollution risks while supporting adaptation and resilience. | |
United Kingdom | BOE | Restatement of Solvency II Assimilated Laws into UK Regulatory Framework | The Prudential Regulation Authority (PRA) has published its policy statement (PS15/24) finalizing the restatement of Solvency II assimilated laws into the UK regulatory framework under the Financial Services and Markets Act 2023. Effective December 31, 2024, the revised framework integrates existing rules into the PRA Rulebook with minimal policy changes while introducing improvements to enhance clarity and consistency. Key updates include adjustments to technical provisions, own funds definitions, and governance systems. These changes aim to align UK insurance regulation with domestic priorities while maintaining robust prudential standards. | |
United Kingdom | BOE | Reforms to the UK Insurance Special Purpose Vehicle (ISPV) Framework | The Prudential Regulation Authority (PRA) has issued a consultation paper outlining significant changes to the UK Insurance Special Purpose Vehicle (UK ISPV) regulatory framework. Key proposals include structural reforms to allow ISPVs to count retained investment returns toward risk exposure, the removal of mandatory Protected Cell Company (PCC) requirements for multi-contract ISPVs, and the introduction of a 30-day grace period for funding requirements. The consultation also suggests an accelerated authorisation pathway for simpler ISPVs and streamlined Senior Managers and Certification Regime (SM&CR) requirements. These updates aim to align the UK ISPV regime with international standards, enhance competitiveness, and attract more market participants. The consultation is open until February 14, 2025. | |
United Kingdom | BOE | The Prudential Regulation Authority (PRA) has updated Supervisory Statement SS5/15 on the treatment of pension scheme risk under Solvency II, effective from December 31, 2024. The revised statement clarifies the PRA’s expectations for insurers sponsoring defined benefit pension schemes or forming part of groups with such sponsorships. It emphasizes careful assessment of pension-related risks in solvency capital requirement (SCR) calculations, covering both solo and group levels. This update aligns with the PRA’s broader Solvency II framework revisions, ensuring robust risk management practices for UK insurers while addressing the complexities of pension scheme obligations. | ||
United Kingdom | BOE | The Prudential Regulation Authority (PRA) has published Supervisory Statement SS8/24, which provides updated expectations for calculating technical provisions under Solvency II. Effective December 31, 2024, the statement introduces simplified methodologies for calculating recoverable from reinsurance contracts, premium adjustment mechanisms, counterparty default adjustments, and risk margins. These updates aim to align with the principles of proportionality and ensure accurate representation of risks and obligations in insurers’ technical provisions. The guidelines apply to all UK Solvency II firms, Lloyd’s members, and third-country branch undertakings, fostering consistency and efficiency in risk assessments. | ||
Investment | China | NFRA | The State Financial Supervision and Administration Bureau has issued the “Management Measures for the Non-Performing Assets Business of Financial Asset Management Companies” (Golden Regulation [2024] No. 17), effective November 11, 2024. These measures establish strict compliance, prudence, openness, and rationality principles for acquiring, managing, and disposing of non-performing assets. They outline permissible assets for acquisition, valuation standards, asset disposal methods, and risk management frameworks. The regulations aim to enhance transparency, prevent systemic risks, and support sustainable asset resolution within China’s financial sector. | |
European Union | ESMA | Report on Compliance with MiFID II Appropriateness and Execution-Only Guidelines | The European Securities and Markets Authority (ESMA) has published a compliance table summarizing the adherence of national competent authorities (NCAs) to its guidelines on MiFID II appropriateness and execution-only requirements. Released on November 15, 2024, the report highlights widespread compliance across Member States, ensuring consistent supervisory practices. The guidelines aim to strengthen investor protection by setting clear standards for assessing the suitability of financial products and services. This initiative reflects ESMA’s commitment to harmonizing regulatory frameworks across the EU financial markets. | |
European Union | European Union | The European Union has adopted Directive (EU) 2024/2811, amending MiFID II (Directive 2014/65/EU) to enhance the appeal of public capital markets and improve access to financing for small and medium-sized enterprises (SMEs). Effective December 2024, the amendments streamline the regulatory framework for SME growth markets, introduce flexible listing conditions, and adjust research unbundling rules to address the decline in investment research for SMEs. Additionally, Directive 2001/34/EC has been repealed, consolidating EU rules to create a unified regulatory approach aimed at increasing market efficiency and competitiveness. | ||
France | AMF | The French financial regulator, Autorité des marchés financiers (AMF), has approved amendments to the operating rules of Aquis Exchange Europe’s multilateral trading facility (MTF). The changes include the introduction of Straight Through Processing (STP) functionality for closing auctions and updates to the liquidity provision program. These updates aim to enhance trading efficiency and market liquidity. The modifications will take effect on a date determined by Aquis Exchange Europe, aligning with its efforts to maintain fair and orderly market operations under AMF supervision. | ||
Global | IOSCO | Revised Liquidity Risk Management Standards for Collective Investment Schemes | The International Organization of Securities Commissions (IOSCO) has released a consultation report on updated Liquidity Risk Management (LRM) Recommendations for Collective Investment Schemes (CIS), with a focus on open-ended funds. The revisions include categorizing funds based on asset liquidity, enhancing the use of liquidity management tools, emphasizing anti-dilution measures, and incorporating guidance on quantity-based tools. Complementary Implementation Guidance outlines technical aspects of managing liquidity risks. These updates, aligned with lessons from recent market challenges and FSB recommendations, aim to strengthen investor protection and systemic stability. Feedback is invited until February 11, 2025, with a final report expected in mid-2025. | |
Romania | ASF Romania | Aligning Capital Testing Rules for Investment Firm Groups with EU Standards | The Romanian Financial Supervisory Authority (ASF) has published a draft norm to implement the European Banking Authority’s (EBA) guidelines on group-level capital testing for investment firms under Article 8 of Regulation (EU) 2019/2033. Effective January 1, 2025, the norm outlines compliance obligations for parent companies of investment firm groups subject to ASF’s consolidated supervision. Key provisions include criteria for simplified permissions, reporting requirements, and conditions for reduced capital levels. This initiative aims to harmonize Romanian prudential supervision practices with EU regulatory standards and enhance the risk management framework for investment firms. | |
United Kingdom | FCA | Discussion Paper on Improving the UK Transaction Reporting Regime | The UK Financial Conduct Authority (FCA) has published a discussion paper (DP24/2) outlining proposals to enhance the UK transaction reporting framework under MiFID II/MiFIR. The paper identifies opportunities to improve data quality, streamline reporting requirements, and align with global standards while addressing challenges unique to UK markets. The FCA seeks feedback on potential changes, including new identifiers for OTC derivatives, adjustments to scope, and reducing reporting burdens for smaller firms. Stakeholders are invited to provide input by February 14, 2025, with the aim of ensuring robust, efficient, and competitive transaction reporting in the evolving financial landscape. |
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