This week’s regulatory updates from across the globe bring you the latest changes shaping the financial and compliance landscape. From revised reporting guidelines and enhanced investor protections to evolving ESG transparency standards and AI supervision frameworks, these updates reflect the growing focus on transparency, innovation, and resilience in the financial sector. Our curated summaries cover critical changes that impact banking, insurance, investment, and compliance practices worldwide, ensuring you stay informed about the most significant developments.
Business Line | Country | Regulator | Regulatory Update | Summary |
All | European Union | EBA | New Guidelines Enhance Information Exchange for Fitness and Propriety Assessments Across the EU | The European Supervisory Authorities (ESAs)—EBA, EIOPA, and ESMA—have issued joint guidelines to improve the exchange of information for assessing the fitness and propriety of directors, key function holders, and qualifying shareholders in financial institutions. These guidelines establish a cross-sectoral ESAs Information System to streamline communication among competent authorities, ensuring timely access to relevant data while adhering to data protection standards. The system does not replace independent assessments but supports authorities in identifying past evaluations conducted by other entities, fostering greater efficiency and consistency in regulatory oversight across the EU. Implementation will proceed in phases, with the system expected to be fully operational for natural persons by May 2025 and for legal entities by April 2026. |
European Union | ESMA | Final Report on CSDR Penalty Mechanism: Enhancing Settlement Discipline in the EU | The European Securities and Markets Authority (ESMA) has published its Final Report on the Central Securities Depositories Regulation (CSDR) penalty mechanism. The report addresses settlement failures, proposing moderate increases in penalty rates to align with securities lending costs and preserve market efficiency. ESMA recommends maintaining the current structure of penalties while rejecting progressive rates due to operational complexities and limited evidence of their effectiveness. It suggests using a 40-business-day threshold for historical data in calculating late matching fail penalties to improve efficiency without overburdening settlement systems. Additionally, ESMA proposes refinements to calculation methods to ensure penalties remain a deterrent without disproportionately impacting market participants, particularly during the transition to the T+1 settlement cycle. These measures aim to strengthen financial market stability while balancing cost and operational feasibility. | |
European Union | European Commission | The European Union has introduced a comprehensive regulation aimed at enhancing transparency, integrity, and comparability in Environmental, Social, and Governance (ESG) rating activities. The regulation, which amends existing frameworks like the Sustainable Finance Disclosure Regulation (SFDR), establishes robust guidelines for the methodologies and governance of ESG rating providers. It emphasizes conflict-of-interest management, public disclosure of rating criteria, and organizational independence to prevent greenwashing and social washing. The legislation also assigns supervisory roles to ESMA, ensuring consistent oversight and enforcement across the Union, with provisions for fines and penalties to deter violations. This regulation is a significant step in bolstering investor confidence and supporting the EU’s sustainable finance agenda under the European Green Deal. | ||
European Union | European Union | Benchmarks Regulation to Strengthen Oversight and Climate Transition Alignment | The European Union has proposed amendments to Regulation (EU) 2016/1011 to refine rules governing financial benchmarks. These changes focus on reducing regulatory burdens for smaller benchmarks while enhancing oversight of critical and significant benchmarks, particularly EU Climate Transition Benchmarks and EU Paris-Aligned Benchmarks. Administrators of these benchmarks must ensure compliance with stricter transparency and governance requirements. The proposal also includes new provisions for benchmarks administered by entities in third countries, requiring alignment with EU standards or equivalent measures. These revisions aim to bolster financial market integrity and advance the EU’s sustainability goals while addressing operational complexities in benchmark administration. | |
Finland | FSA | Consultation on AML/CFT Revisions to Promote Financial Inclusion | The Financial Action Task Force (FATF) has launched a public consultation to revise its Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) standards, focusing on better integrating financial inclusion into its framework. The proposed changes primarily target Recommendation 1 and its interpretive notes, alongside consequential amendments to Recommendations 10 and 15. Key updates include replacing “commensurate” with “proportionate” to clarify risk mitigation expectations and encouraging simplified measures for lower-risk situations. FATF also aims to adapt its approach to technological advancements, emphasizing proportionality in handling non-face-to-face transactions. Stakeholders are invited to submit feedback by December 6, 2024, as part of FATF’s efforts to align regulatory measures with inclusivity and technological progress. | |
Global | IFRS | Guide to Support Sustainability-Related Disclosures Under ISSB Standards | The IFRS Foundation has published a comprehensive guide to assist companies in identifying and disclosing material information about sustainability-related risks and opportunities, as outlined in the ISSB Standards. This initiative supports the International Sustainability Standards Board’s (ISSB) mission to promote global adoption of these standards. The guide emphasizes integrated thinking and the interconnectedness of a company’s operations, resources, and impacts across its value chain. It explains how sustainability risks and opportunities, arising from a company’s dependencies on or impacts on resources and relationships, could affect its financial prospects. Drawing from IFRS S1, the guide aligns with the materiality judgment process of IFRS Practice Statement 2 and provides insights into integrating sustainability disclosures with financial statements. It also offers guidance for aligning ISSB Standards with other frameworks like ESRS and GRI, catering to the diverse needs of stakeholders and investors globally. | |
Global | PRI Association | The Principles for Responsible Investment (PRI), UNEP Finance Initiative (UNEP FI), and the Generation Foundation have released updated guidance on “Investing for Sustainability Impact” (IFSI) in November 2024. The guidance, informed by the “Legal Framework for Impact” report, introduces a comprehensive four-step framework for institutional investors to align their strategies with sustainability goals. These steps include determining intentions, setting measurable goals, taking targeted actions such as capital allocation and policy engagement, and monitoring progress. The report emphasizes addressing systemic risks like climate change and offers practical solutions for implementation challenges, including political instability, policy uncertainties, and long-term stewardship benefits. This guidance aims to empower investors to drive measurable positive impacts on global sustainability while fulfilling fiduciary duties. | ||
Guernsey | GFSC | Updates to AML/CFT/CPF Handbook Appendices Reflect FATF and Jurisdictional Changes | The Commission has announced updates to Appendices C and I of the AML/CFT/CPF Handbook on Countering Financial Crime. Gibraltar has been added to Appendix C, denoting its equivalence as a jurisdiction where specific customer due diligence (CDD) concessions may apply in low-risk circumstances. However, firms are reminded to base CDD decisions on comprehensive customer risk assessments, considering all relevant factors beyond jurisdictional equivalence. Appendix I has been revised to align with the latest Financial Action Task Force (FATF) updates. Senegal has been removed following its exit from FATF’s list of jurisdictions under increased monitoring. Meanwhile, Algeria, Angola, Côte d’Ivoire, and Lebanon remain listed. Other jurisdictional assessments have led to the addition of Belize and the removal of Barbados, Chile, and Senegal. These updates underline the importance of staying informed about evolving risk landscapes to ensure compliance and effective risk management. | |
Malta | MFSA | Malta Implements Markets in Crypto-Assets Act to Align with EU MiCA Regulation | The Malta Financial Services Authority (MFSA) has announced the implementation of the Markets in Crypto-Assets (MiCA) Act, 2024, alongside related regulations, to align with the European Union’s MiCA Regulation (EU 2024/1114). The new legislation establishes a regulatory framework for issuers of asset-referenced tokens, e-money tokens, and other crypto-assets, as well as crypto-asset service providers. It designates the MFSA as the competent authority for supervision and enforcement. Supplementing the MiCA Regulation, the Act introduces local provisions covering appeals, offences, and confidentiality obligations. Accompanying regulations, such as the Markets in Crypto-Assets Act (Fees) Regulations, specify fee structures for licensing and supervision, while amendments to the Virtual Financial Assets Regulations facilitate the transition from Malta’s existing crypto-asset framework to the EU-wide MiCA regime. These changes aim to ensure consistency, enhance oversight, and promote proportionality in regulating the crypto-asset sector within Malta and the EU. | |
Netherlands | Dutch Central Bank | Consultation on Revised SIRA Good Practices to Strengthen Integrity Risk Management | The Dutch Central Bank (DNB) has launched a public consultation on its revised SIRA (Systematic Integrity Risk Analysis) Good Practices, with feedback open until January 17, 2025. The new guidance replaces the 2015 version, addressing concerns over its overly prescriptive interpretation by institutions. The updated SIRA Good Practices emphasize a flexible, risk-based approach to identifying, analyzing, and mitigating integrity risks while ensuring compliance with relevant regulations. Key changes include a streamlined risk management cycle, enhanced focus on organization-specific risk profiles, and increased emphasis on data-driven and scenario-based analyses. These updates aim to support institutions in implementing dynamic, effective integrity risk management frameworks tailored to their specific operations and risks. | |
United Kingdom | BOE | The Bank of England has published a consultation paper on introducing Fundamental Rules for financial market infrastructures (FMIs), including central counterparties (CCPs), central securities depositories (CSDs), recognised payment systems (RPSOs), and specified service providers (SSPs). The rules aim to enhance financial and operational resilience, ensure transparent regulatory outcomes, and support the UK’s financial stability. Key provisions include principles for risk management, operational resilience, and systemic risk assessment, with a focus on mitigating financial system vulnerabilities. The consultation, open until February 19, 2025, seeks feedback on implementation and supervisory expectations, emphasizing the Bank’s commitment to fostering innovation while maintaining robust financial safeguards. | ||
United States | CPPA | Formal Public Comment Period for Draft ADMT Regulations Opens | The California Privacy Protection Agency (CPPA) has initiated a formal public comment period for its proposed rulemaking package, which includes updates to existing California Consumer Privacy Act (CCPA) regulations and new rules for cybersecurity audits, risk assessments, automated decision-making technology (ADMT), and insurance companies. Running from November 22, 2024, to January 14, 2025, the public comment period provides opportunities for written feedback and oral presentations during a hybrid public hearing on January 14. Key proposals include requirements for annual cybersecurity audits, consumer rights to access and opt-out of ADMT use, and clarifications on CCPA compliance for insurance companies. By extending the comment period, CPPA aims to ensure thorough public and industry engagement in shaping these pivotal privacy regulations. | |
Banking | European Union | European Council | The EU Council has adopted updated rules under the European Market Infrastructure Regulation (EMIR) to enhance the attractiveness, resilience, and supervisory framework of EU clearing services. The revised regulations aim to reduce dependency on non-EU systemic central counterparties (CCPs) by requiring market participants to maintain active accounts and clear a portion of systemic derivative contracts within the EU. These changes streamline procedures, improve regulatory consistency, and strengthen CCP supervision, supporting the EU’s strategic autonomy and financial stability. The amendments, part of the broader effort to deepen the Capital Markets Union, respond to lessons from the 2008 financial crisis and will come into effect 20 days after publication in the EU’s Official Journal. | |
Global | UNEPFI | UN Principles for Responsible Banking: New Guidance on Transparency and Impact | The United Nations Environment Programme Finance Initiative (UNEP FI) has released updated Guidance for Transparency under its Principles for Responsible Banking (PRB). This guidance assists signatory banks in transparently reporting their alignment with sustainability goals, such as the UN Sustainable Development Goals (SDGs) and the Paris Climate Agreement. It emphasizes the importance of embedding sustainability across governance, client engagement, and target-setting. Key features include frameworks for disclosing environmental, social, and governance (ESG) risks, measuring impacts, and setting SMART targets to address the most significant positive and negative impacts. The guidance also details the importance of consistent reporting, third-party assurance, and integrating sustainability into core business strategies. With a strong focus on climate change, biodiversity, and financial inclusion, the document provides actionable steps to help banks align operations with global sustainability priorities while fostering accountability and innovation. | |
Global | BIS | Basel Committee Advances Global Banking Resilience with Basel III and New Guidelines | The Basel Committee on Banking Supervision has reaffirmed its commitment to fully and consistently implement the Basel III framework globally. Meeting on November 19–20, 2024, the Committee approved final guidelines to enhance counterparty credit risk management, addressing weaknesses highlighted by recent non-bank financial intermediation (NBFI) distress. Additionally, it advanced tools for supervisory effectiveness, focusing on liquidity risk, interest rate risk, and business model sustainability, with updates expected in 2025. The Committee also endorsed a report on cycle-neutral countercyclical capital buffers and progressed its Pillar 3 disclosure framework for climate-related financial risks, slated for completion in the first half of 2025. These efforts aim to strengthen the resilience and transparency of the global banking system. | |
Hong Kong | HKMA | Hong Kong Prepares for Basel III Final Reforms Implementation in January 2025 | The Hong Kong Monetary Authority (HKMA) has issued guidance to authorized institutions (AIs) ahead of the Basel III final reform package (B3F) implementation on January 1, 2025. Significant progress has been made, with most institutions completing system testing and undergoing quality assurance reviews. The HKMA emphasizes key practices for successful adoption, including senior management oversight, comprehensive audit trails, updates to internal processes, staff training, and ongoing post-implementation monitoring. These measures aim to ensure a seamless transition and compliance with revised capital standards, supporting robust risk management and financial stability in Hong Kong’s banking sector. | |
South Africa | Reserve Bank | Guidance on Business Risk Assessments for Financial Crime Compliance | The South African Prudential Authority (PA) has issued updated supervisory guidance on Business Risk Assessments (BRAs) for combating money laundering, terrorist financing, and proliferation financing (ML/TF/PF). The guidance emphasizes comprehensive methodologies to identify and mitigate risks across customer profiles, products, delivery channels, geographic exposure, and operational vulnerabilities. It highlights the need for robust governance, tailored controls, and systematic residual risk calculations aligned with the institution’s risk appetite. Key requirements include ongoing staff training, enhanced Know Your Customer (KYC) practices, and independent testing of compliance frameworks. These updates align South Africa’s financial institutions with global standards, fortifying defences against financial crime risks. | |
South Africa | Reserve Bank | The South African Reserve Bank has issued a proposed directive under Section 6(6) of the Banks Act, 1990, addressing the completion of Form BA 400 and related operational risk capital requirements. Effective from July 1, 2025, the directive specifies conditions for calculating the capital required for operational risk using the standardised approach. Key provisions include the use of internal loss data for banks with a Business Indicator (BI) exceeding ZAR 5 billion, subject to quality review every two years. The directive also introduces phased Internal Loss Multiplier (ILM) floors, BI marginal coefficients, and stipulates capital floor percentages based on BI thresholds. The guidance ensures compliance with amended regulations and enhances consistency in risk measurement across banks. | ||
United Kingdom | FCA | The UK has implemented amendments to the Payment Services Regulations (PSRs), empowering Payment Service Providers (PSPs) to delay outbound Authorised Push Payments (APPs) by up to four business days if there are reasonable grounds to suspect fraud or dishonesty. This regulatory change, aimed at reducing APP fraud, aligns with the APP fraud reimbursement requirement introduced earlier on October 7, 2024. The Financial Conduct Authority (FCA) has issued guidance under FG24/6, detailing the application of these provisions, including thresholds for suspicion, obligations during the delay, and monitoring requirements. These measures are designed to enhance fraud prevention without unduly disrupting legitimate transactions, ensuring compliance with consumer protection duties. | ||
United Kingdom | GOV.UK | UK Statutory Instruments | The UK Treasury has issued the Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024, effective November 22, 2024. These amendments align with the revocation of the EU Capital Requirements Regulation (CRR) under the Financial Services and Markets Act 2023, redefining “CRR Rules” and “recognised exchange” for credit risk calculation purposes. The new definition of “recognised exchange” now includes UK-regulated markets, recognised overseas investment exchanges, and certain other investment exchanges meeting conditions set by the Prudential Regulation Authority (PRA). This update impacts the eligibility of securities as collateral for preferential capital treatment and enhances the clarity of the UK’s post-Brexit prudential framework. | ||
Insurance | European Union | European Commission | The European Commission adopted an implementing regulation on November 18, 2024, providing updated technical information for calculating technical provisions and basic own funds under Solvency II. Applicable for reporting reference dates between September 30 and December 30, 2024, the regulation specifies the relevant risk-free interest rate term structures, fundamental spreads for matching adjustments, and volatility adjustments for insurance and reinsurance undertakings. This update ensures uniformity in prudential reporting across Member States and addresses the immediate need for consistent application of market data as of September 2024. The regulation, effective immediately upon publication, underscores the EU’s commitment to maintaining robust risk assessment in the insurance sector. | |
Global | IAIS | The International Association of Insurance Supervisors (IAIS) has issued a draft application paper on the supervision of artificial intelligence (AI) in the insurance sector for public consultation, open until February 17, 2025. This guidance supports consistent global oversight of AI applications in insurance, focusing on governance, risk management, fairness, and transparency. Key highlights include integrating AI into risk frameworks, addressing biases, ensuring explainable outcomes, and managing third-party AI systems. The paper emphasizes balancing innovation with consumer protection and fairness. Stakeholders are encouraged to submit feedback through the consultation tool, marking a significant step towards ethical and transparent AI use in insurance. | ||
Singapore | MAS | Consultation Paper on Proposed Enhancements to the Deposit Insurance Scheme | The Monetary Authority of Singapore (MAS) has published a consultation paper proposing significant enhancements to the Deposit Insurance (DI) Scheme, with a focus on increasing depositor protection and improving operational efficiency. Key updates include raising the maximum DI coverage from SGD 75,000 to SGD 100,000 per depositor per DI Scheme member, effective April 1, 2024, to restore full coverage for 91% of insured depositors. Other measures include clarifying the computation of insured deposits, streamlining operational processes with digitized systems, introducing a seven-year claim limit for unclaimed compensation, and transferring the administration of unclaimed DI monies from the Public Trustee Office to the Singapore Deposit Insurance Corporation. Stakeholders are invited to provide feedback by July 31, 2023, to shape the final amendments aimed at strengthening depositor confidence and system resilience. | |
Investment | Australia | ASIC | The Australian Securities and Investments Commission (ASIC) has introduced new regulatory guidance and updates in response to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 (DBFO Act). These updates include four new information sheets addressing fee arrangements, informed consent for insurance commissions, and disclosure obligations, along with revisions to Regulatory Guide 246 on conflicted remuneration and Regulatory Guide 175 on financial product adviser conduct. Effective January 10, 2025, the guidance aids financial advisers in complying with revised obligations under the DBFO Act, enhancing transparency and accountability in financial services. Further updates will follow once additional reforms under the DBFO package are legislated. | |
Canada | BCSC | The Canadian Securities Administrators have proposed changes to Companion Policy 51-102CP Continuous Disclosure Obligations, focusing on electronic access and notification for financial statements and Management’s Discussion and Analysis (MD&A). Reporting issuers may provide financial statements electronically, with provisions to ensure accessibility through SEDAR+ and maintain posted documents until the next reporting period. Advance notifications for electronic access are required at least 25 days prior, with recommended additional communication methods to enhance stakeholder awareness. The proposal emphasizes transparency and ease of access while aligning with standing instructions for document delivery under existing securities communication regulations. These changes aim to modernize and streamline disclosure practices. | ||
European Union | ESMA | The European Securities and Markets Authority (ESMA) has published a consultation paper on November 20, 2024, seeking feedback on the implementation of the Active Account Requirement (AAR) under the revised European Market Infrastructure Regulation (EMIR 3). The AAR aims to mitigate financial stability risks by mandating that financial and non-financial counterparties with significant exposure to systemically important third-country central counterparties (CCPs) maintain operational and representative accounts with EU-based CCPs. Key areas for consultation include the scope of derivatives subject to the AAR, operational and reporting conditions, representativeness criteria for derivative classes, and stress-testing protocols. Stakeholders are invited to comment on these proposals by January 27, 2025, with ESMA aiming to finalize its technical standards in 2025. These measures are expected to reduce systemic risks and promote the use of EU CCPs for clearing critical financial products. | ||
Global | IOSCO | The International Organization of Securities Commissions (IOSCO) has opened a public consultation on proposed recommendations for pre-hedging practices in financial markets. Pre-hedging, defined as trading conducted by a dealer in anticipation of a client transaction, is often used to manage market risk but raises concerns about market integrity and client fairness. The consultation aims to standardize practices globally, addressing issues such as transparency, conflicts of interest, and market impact. IOSCO proposes cumulative recommendations for acceptable pre-hedging, including genuine risk management purposes, fairness to clients, and minimizing market impact. Stakeholders are invited to submit feedback by February 21, 2025, to shape final recommendations. | ||
Luxembourg | CSSF | The Commission de Surveillance du Secteur Financier (CSSF) has released version 5 of its guidelines on U1.1 reporting, effective November 15, 2024. Key updates include the addition of eDesk and API transmission channels for streamlined reporting and the incorporation of XML format specifications for enhanced data accuracy. The guidelines also outline detailed procedures for transmitting reports, addressing errors, and providing feedback through standardized naming conventions and control mechanisms. These updates aim to improve the efficiency and reliability of regulatory reporting by Luxembourg-based investment funds, ensuring compliance with evolving industry standards. | ||
Malta | MFSA | Consultation on Prudential Consolidation for Investment Firms | The Malta Financial Services Authority (MFSA) has launched a consultation on the prudential consolidation requirements for investment firms under the Investment Firms Regulation (IFR) and the European Banking Authority’s (EBA) Guidelines on the Group Capital Test (GCT). Effective January 1, 2025, investment firms in scope must comply with prudential consolidation rules under Article 7 and apply for Article 8 derogations where applicable. The MFSA has requested investment firm groups to submit assessments of their consolidated situations through the LH Portal and, where necessary, request approval to apply the Group Capital Test. This consultation addresses the EBA’s qualitative and quantitative criteria and the potential impact of forthcoming EBA-ESMA reviews on the prudential framework. Stakeholders are encouraged to provide feedback by December 16, 2024, via email to shape the final implementation of these requirements. | |
Switzerland | FINMA | The Swiss Financial Market Supervisory Authority (FINMA) has published a circular detailing its supervisory practices under the Financial Services Act (FinSA), effective January 1, 2025. This circular aim to enhance transparency, ensure legal certainty, and provide consistent investor protection across supervised institutions. It covers client information requirements, such as explaining the nature of financial services, risks involved, and third-party compensation. The circular also addresses conflicts of interest, particularly concerning proprietary financial instruments. Despite mixed reactions during the consultation process, with support from consumer protection groups and opposition from banks and industry bodies, FINMA has incorporated feedback to refine the guidance. This initiative marks a significant step in clarifying the practical application of FinSA’s conduct rules. | ||
United Kingdom | GOV.UK | UK Statutory Instruments | Disclosure Rules for Packaged Retail and Insurance-based Investment Products | The UK Treasury has amended the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, effective November 22, 2024. The changes exclude UK-listed closed-ended investment companies from the PRIIPs framework, removing their obligation to produce Key Information Documents (KIDs). The amendment also exempts costs associated with these companies from aggregation and disclosure requirements under Commission Delegated Regulation (EU) 2017/565. This adjustment simplifies compliance for firms and reflects the UK’s approach to tailoring EU-derived financial regulations post-Brexit. The changes aim to reduce administrative burdens without significantly impacting stakeholders. | |
United Kingdom | FCA | The Financial Conduct Authority (FCA) has published Discussion Paper DP24/2, seeking feedback on improving the UK transaction reporting regime. The consultation aims to address data quality challenges, reduce compliance burdens, and align the regime with evolving market practices. Key areas include simplifying reporting for over the counter (OTC) derivatives, enhancing the utility of transaction reports through new fields, and considering the adoption of advanced technologies like Digital Token Identifiers (DTIs). Stakeholders are encouraged to comment on proposed changes, including options for harmonizing with international standards and removing duplicative reporting requirements. The consultation is open until February 14, 2025, inviting input from firms, trade associations, and market participants to shape the future of the UK’s transaction reporting framework. |
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