In the ever-evolving world of finance, regulatory changes play a pivotal role in shaping the industry. Stay informed with the latest regulatory changes impacting the financial market! Here’s some of the key updates from around the globe:
1. APRA (Australian Prudential Regulation Authority) 🔗
The Australian Prudential Regulation Authority (APRA) has initiated a consultation on minor updates to the capital framework for authorised deposit-taking institutions (ADIs). The proposed updates address technical issues raised by the industry regarding the implementation of the new capital framework for ADIs, specifically revisions to framework on Interest Rate Risk in the Banking Book . 🔗
2. BIS (Bank for International Settlements) 🔗
BIS has issued a press release outlining key developments around international banking and finance. In a meeting on December 5 and 7, 2023, BIS decided to consult on targeted revisions to standards related to crypto assets and interest rate risk in the banking book. The committee aims to address window-dressing behaviour within the global systemically important banks (G-SIB) framework and will collect higher frequency data items to inform policy options to reduce such behaviour. Additionally, the committee discussed risk management considerations associated with the transition to a low carbon economy and related physical risks. It reviewed and approved assessment reports on the implementation of Basel III reforms by Mexico and Switzerland, covering aspects such as the Net Stable Funding Ratio, large exposures framework, and Liquidity Coverage Ratio. The consultation papers on crypto assets and interest rate risk adjustments are set to be published this month. 🔗
3. Bermuda Monetary Authority (BMA) 🔗
The BMA has released a notice regarding the Investment Funds Amendment Act 2023 and updates to related rules following a consultation process initiated in April 2023. The amendments aim to enhance supervisory powers, allowing the Authority to take targeted corrective action proportional to identified breaches. Changes include clarifications on operators’ obligations, expanded use of late fees, powers for filing deadline extensions, broader authority directions, communication requirements for auditors, and housekeeping updates. 🔗
4. ESAs (European Supervisory Authorities) 🔗
The ESAs launched a public consultation on the second batch of policy mandates under Digital Operational Resilience Act (DORA), comprising four draft Regulatory Technical Standards (RTS), one set of draft Implementing Technical Standards (ITS), and two sets of guidelines (GL). The consultation period allows stakeholders to provide input on the proposed standards and guidelines, with the expectation of finalizing and implementing these measures by January 2025.🔗
5. ESAs (European Supervisory Authorities) 🔗
The European Supervisory Authorities (ESAs) – EBA, EIOPA, and ESMA – have launched a second consultation on joint Guidelines for the exchange of information relevant to fit and proper assessments. This consultation focuses on amending the Guidelines to include legal persons, ensuring comprehensive coverage of data subjects in the information exchange process. The objective is to enhance efficiency by harmonizing practices across sectoral supervisors for both natural and legal persons.🔗
6. EBA (European Banking Authority) 🔗
The European Banking Authority (EBA) has released a Consultation Paper containing draft regulatory technical standards (RTS) outlining requirements for policies and procedures addressing conflicts of interest for issuers of asset-referenced tokens (ARTs) under the Markets in Crypto-Assets Regulation (MiCAR). The draft RTS emphasizes attention to conflicts tied to asset reserves, addresses personal transactions, and mandates that remuneration procedures do not create conflicts. 🔗
7. EIOPA (European Insurance and Occupational Pensions Authority) 🔗
The European Insurance and Pensions Authority (EIOPA) has released a follow-up report to the 2019 peer review on the implementation of the Prudent Person Rule for Institutions for Occupational Retirement Provision (IORPs) in accordance with the IORP II requirements. The Prudent Person Rule mandates that IORPs invest capital in the best interest of members and beneficiaries, adhering to specific investment rules. The report evaluates how national competent authorities (NCAs) implemented the recommended actions from the 2019 review. 🔗
8. EIOPA (European Insurance and Occupational Pensions Authority) 🔗
On December 4, 2023, a Final Report on draft Regulatory Technical Standards concerning the review of the Principal Adverse Impact (PAI) and financial product disclosures in the Sustainable Finance Disclosure Regulation (SFDR) Delegated Regulation was published. The SFDR aims to promote sustainability in the financial sector by requiring disclosure of environmental, social, and governance (ESG) considerations. Additionally, consumer testing reports for SFDR in France, the Netherlands, Italy, and Poland were released on the same date. 🔗
9. FCA (Financial Conduct Authority) 🔗
The Financial Conduct Authority (FCA) has issued final guidance under section 139A(1) of the Financial Services and Markets Act 2000 (FSMA). This guidance, effective from December 8, 2023, pertains to the FCA’s Dual-regulated firms Remuneration Code in SYSC 19D, applicable to banks, building societies, UK designated investment firms, and certain overseas firms. The guidance supersedes any prior frequently asked questions (FAQs) issued by the FCA or its predecessor. It provides clarification on the identification of material risk takers, the process for such identification, and exclusions. 🔗
10. FCA (Financial Conduct Authority) 🔗
The UK’s Financial Conduct Authority (FCA) has published a market study on the credit information market. The study found that there are several issues with the market, including poor data quality, lack of competition, and poor consumer engagement. The FCA has proposed a number of remedies to address these issues, including reforms to industry governance arrangements, mandatory data sharing with designated credit reference agencies (CRAs), data contributor requirements, streamlined access to statutory credit reports, streamlined dispute processes, more timely reporting, and improved Current Account Turnover (CAT) data.🔗
11. Financial Stability Board (FSB) 🔗
The Financial Stability Board (FSB) has released a final report addressing the evolving landscape of financial institutions’ interactions with third-party service providers, recognizing the benefits and risks associated with such relationships. The report outlines a toolkit designed to enhance third-party risk management and oversight for both financial institutions and regulatory authorities. It also offers tools for identifying, monitoring, and managing systemic third-party dependencies and potential systemic risks. The toolkit is intended to complement existing international standards and guidance rather than replace them. 🔗
12. Financial Services Commission, Mauritius (FSC Mauritius) 🔗
The Financial Services Commission (FSC) in Mauritius has released a draft of the Commodities Bill for public consultation, adhering to its transparent rule-making process. The bill, aimed at regulating the commodities sector, is open for comments, feedback, and suggestions from industry stakeholders and the public until January 31, 2024. It emphasizes that the provisions in the draft do not represent the final stance of the FSC and may be subject to revision based on the views and comments received during the consultation period.🔗
13. Greenhouse Gas Protocol 🔗
The Greenhouse Gas Protocol (GHG Protocol) has released a draft summary report for the Corporate Standard Survey, which gathered feedback on the Corporate Standard, Scope 2 Guidance, Scope 3 Standard, and market-based accounting approaches between November 2022 and March 2023. The Draft Summary Report, based on 375 responses to the Corporate Standard Survey, offers a comprehensive overview of stakeholder feedback. A review period for the report is open until January 24, 2024, during which stakeholders who completed the survey are invited to ensure the accurate representation of their feedback.🔗
14. UK Government – Oil and Gas Offshore Environmental Legislation 🔗
The UK government has provided guidance on oil and gas offshore environmental legislation. The update encompasses guidance on the regulatory framework governing environmental aspects of offshore oil and gas exploration and production, offshore gas unloading and storage and offshore carbon dioxide storage activities. The guidelines cover a range of topics, including environmental impact assessments, discharge permits, and emergency response planning. Companies operating in this industry should carefully review the guidance to ensure compliance with the updated legislative framework. 🔗
15. UK Government – Modern Leasehold Ground Rent Consultation 🔗
The Department for Levelling Up, Housing, and Communities in the UK has published a policy paper regarding the consultation on “modern leasehold: restricting ground rent for existing leases.” The government is seeking input on the proposal to cap the maximum ground rent that residential leaseholders can be required to pay in England and Wales and is interested in perspectives on how such a cap can be effectively implemented. The published consultation impact assessment aims to subject the government’s existing evidence and assumptions to scrutiny by stakeholders. 🔗
16. UK Government – Pensions Act Amendments 2023 🔗
The Department for Work and Pensions has published statutory guidance on the Pensions Act 2004 and the Equality Act 2010 (Amendment) (Equal Treatment by Occupational Pension Schemes) Regulations 2023. These draft regulations are set to be enacted under the restatement powers outlined in the Retained EU Law (Revocation and Reform) Act 2023. The statutory instrument focuses on two key areas of equal treatment within occupational pension schemes: equalizing guaranteed minimum pensions between men and women and ensuring survivor benefits for couples in same-sex legal relationships. The regulations apply to Great Britain and seek to provide clarity and legal frameworks in alignment with EU law, addressing gender-based disparities and promoting equality in pension-related matters.🔗
17. UK Government – Pension Protection Fund Compensation Regulations 2023 🔗
The Department for Work and Pensions has issued statutory guidance on the Pensions Act 2004 (Amendment) (Pension Protection Fund Compensation) Regulations 2023. These regulations aim to streamline and clarify legislation by removing redundant references to the Pension Protection Fund compensation cap. The changes are designed to enhance the transparency and simplicity of the legal framework governing pensions. The update responds to the Court of Justice of the European Union’s judgment in the Hampshire case on September 6, 2018, which emphasized that, in the event of employer insolvency, former employees should receive no less than 50% of their accrued old age benefits.🔗
18. UK Government – Occupational Pension Schemes Amendment Regulations (Northern Ireland) 2023 🔗
The Department for Work and Pensions has released statutory guidance on the Occupational Pension Schemes (Amendment) (Equal Treatment) Regulations (Northern Ireland) 2023. These draft regulations, enacted under the restatement powers within the Retained EU Law (Revocation and Reform) Act 2023, aim to address two specific areas of equal treatment within occupational pension schemes in Northern Ireland. The focus areas include the equalization of guaranteed minimum pensions between men and women and the provision of survivor benefits for couples in same-sex legal relationships.🔗
19. UK Government – Financial Services Regulation Measurement Call for Proposals 🔗
The UK government has concluded its consultation on Financial Services Regulation: Measuring Success, as outlined in the Financial Services and Markets Act (FSMA) 2023. The consultation, which ran from May 9, 2023, to July 4, 2023, sought proposals on additional metrics for the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) to publish in relation to their new secondary objectives of facilitating the international competitiveness and growth of the UK economy. The government’s response, based on 56 received responses, outlines the new metrics that regulators will report to support scrutiny of their work in embedding and advancing these objectives. These metrics will be integrated into the FCA’s existing reporting frameworks, while the PRA, in its approach to policymaking, will include the listed metrics along with additional ones it deems relevant, publishing them by Summer 2024. 🔗
20. UK Government – Financial Services and Markets Act 2000 (Ombudsman Scheme) Regulations 2024 🔗
The UK government has released an illustrative draft of a proposed statutory instrument, “The Financial Services and Markets Act 2000 (The Ombudsman Scheme) Regulations 2024,” along with a policy note. This draft instrument, subject to parliamentary approval, aims to empower the Financial Ombudsman Service (FOS) to levy case fees on claims management companies (CMCs) and other relevant professional representatives that bring cases to the FOS on behalf of complainants. The FOS retains the responsibility to determine its fee-charging approach within the parameters set by the government. This illustrative draft is published to support the FOS’s consultation on fee charging in its Plans and Budget 2024-25. The government intends to finalize the draft regulations after the closure of the FOS Plans and Budget 2024-2025 consultation before introducing them to Parliament. 🔗
21. UK Government – Draft Legislation on Income Tax Digital Requirements (Amendment) Regulations 2024 🔗
The HM Revenue & Customs has initiated an open consultation on the draft legislation titled “Income Tax (Digital Requirements) (Amendment) Regulations 2024.” The consultation seeks feedback on the proposed regulations and associated notices, focusing on changes to Making Tax Digital (MTD) for Income Tax, applicable from April 2026. The regulations target relevant persons, including unincorporated businesses and landlords, with business and/or property income exceeding £50,000, followed by those with income over £30,000 from April 2027. The amendments, detailed in the draft regulations and notices, encompass a revised MTD mandate date and threshold, improved design of quarterly updates, simplification of processes by removing End of Period statements, and the introduction of easements for landlords with jointly owned property.  🔗
22. UK Statutory Instrument 2023 No. 1346 – The Insurance and Reinsurance Undertakings (Prudential Requirements) (Risk Margin) Regulations 2023 🔗
The Insurance and Reinsurance Undertakings (Prudential Requirements) (Risk Margin) Regulations 2023 have been issued under the Financial Services and Markets Act 2023, effective from December 31, 2023. The Treasury, after consultation with the Financial Conduct Authority and Prudential Regulation Authority, introduces these regulations to amend the calculation of the risk margin as outlined in Commission Delegated Regulation (EU) 2015/35. The amendments include changes in the risk tapering factor, cost-of-capital rate, and deadlines for submitting supervisory reports. The explanatory note clarifies that the regulations aim to reduce the amount of risk margin insurers must hold, streamline reporting requirements, and modify conditions for revoking transitional deduction approvals. 🔗
23. UK Statutory Instrument 2023 No. 1316 – The Financial Services and Markets Act 2023 (Resolution of Central Counterparties: Partial Property Transfers and Safeguarding of Protected Arrangements) Regulations 2023 🔗
The Financial Services and Markets Act 2023 (Resolution of Central Counterparties: Partial Property Transfers and Safeguarding of Protected Arrangements) Regulations 2023, laid out by HM Treasury, introduces a special resolution regime for central counterparties (CCPs) under Schedule 11 of the Financial Services and Markets Act 2023. The legislation aims to provide safeguards for crucial contractual arrangements, such as set-off and netting arrangements, during the resolution process of CCPs by the Bank of England. The regulations address partial property transfers and write-down powers, ensuring the protection of arrangements vital to CCPs’ operations, clearing members, and creditors. 🔗
24. UK Statutory Instrument 2023 No. 1313 – The Resolution of Central Counterparties (Modified Application of Corporate Law and Consequential Amendments) Regulations 2023 🔗
The Resolution of Central Counterparties (Modified Application of Corporate Law and Consequential Amendments) Regulations 2023, effective from December 31, introduces a new special resolution regime for central counterparties (CCPs) under Schedule 11 to the Financial Services Act 2023, replacing the existing regime in the Banking Act 2009. Applying certain provisions of the Companies Act 2006 with modifications and making consequential amendments, the regulations cover technical modifications, shareholder rights, and disapplication of certain rules. Amendments to various acts, including tax-related legislation and the disclosure of confidential information, align with the new CCP Schedule. 🔗
25. UK Statutory Instrument 2023 No. 1306 – The Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 2) Regulations 2023 🔗
The Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 2) Regulations 2023, effective from December 5, have been introduced by the Treasury under the Sanctions and Anti-Money Laundering Act 2018. These regulations amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 by substituting the list of high-risk third countries in Schedule 3ZA with a new list. 🔗
26. Insurance Authority (IA) Hong Kong – Press Release on Licensing and Control of Insurance Intermediaries 🔗
The Insurance Authority (IA) has initiated a six-week public consultation on the draft Insurance (Valuation and Capital) Rules (Cap.41R) and the draft Insurance (Submission of Statements, Reports, and Information) Rules (Cap.41S) to align with the implementation of the Risk-based Capital (RBC) regime. The draft rules delineate capital adequacy requirements and specify the valuation of assets and liabilities for insurers under the RBC regime. Concurrently, the rules define the types of returns, submission frequency, and methods for providing information to the IA. The implementation of the RBC regime, facilitated by the Insurance (Amendment) Bill 2023, aims to enhance the financial stability of insurers in Hong Kong, align with global standards, and promote better asset-liability matching and robust risk management practices.  🔗
27. Information Commissioner’s Office (ICO) UK – Draft Data Protection and Journalism Code of Practice Consultation Responses 🔗
The Information Commissioner’s Office (ICO) has concluded the first consultation on the draft Data Protection and Journalism Code of Practice, as mandated by section 124 of the Data Protection Act 2018. The code aims to provide practical guidance on adhering to data protection legal requirements and best practices, specifically tailored for individuals and organizations utilizing personal data for journalistic purposes. The responses from various entities, including media organizations, legal associations, and educational institutions, have been published along with a summary outlining how the ICO addressed the feedback. This initiative underscores the ICO’s commitment to fostering compliance and ethical use of personal data within the journalism sector. 🔗
28. International Organization of Securities Commissions (IOSCO) – Regulatory News Issue 715 🔗
The International Organization of Securities Commissions (IOSCO) has released a final report detailing supervisory practices adopted by its members to combat greenwashing. The report, in alignment with IOSCO’s earlier recommendations from November 2021 and a subsequent Call for Action in November 2022, outlines global initiatives addressing challenges such as data gaps, transparency issues, and inconsistencies in sustainability product classification. Despite ongoing efforts to address these challenges, greenwashing persists as a significant market conduct concern, posing risks to investor protection and market integrity. The report emphasizes the need for reliable and consistent sustainability-related information to foster trust in sustainable finance, urging collaboration and knowledge exchange among regulators, industry participants, and policymakers on a global scale. 🔗
29. International Organization of Securities Commissions (IOSCO) – Regulatory News Issue 714 🔗
The International Organization of Securities Commissions (IOSCO) has initiated a 90-day public consultation by releasing a Consultation Report focused on promoting integrity and orderly functioning in Voluntary Carbon Markets (VCMs). The proposed Good Practices, building on Key Considerations from a November 2022 Discussion Paper and feedback received, aim to establish a foundation for the growth of VCMs. Verena Ross, co-Chair of the STF Carbon Markets Workstream, highlighted the need for fair, efficient, and transparent markets, echoing core IOSCO principles. The Good Practices emphasize sound market structures, transparency objectives, and market conduct practices to support the growth of VCMs with financial integrity. The consultation invites stakeholders to provide insights and expertise to enhance these practices. 🔗
30. Monetary Authority of Singapore (MAS) – Consultation Paper on Proposed Enhancements to the Policy Owners’ Protection Scheme 🔗
The Monetary Authority of Singapore (MAS) has released a Consultation Paper on Proposed Enhancements to the Policy Owners’ Protection Scheme (PPF Scheme) in Singapore. The pre-funded PPF Scheme, established in 2011, safeguards policy owners of life insurance and certain general insurance policies in case of a direct insurer failure. The consultation paper invites public feedback on suggested modifications to enhance the scheme’s coverage, simplify its design, and improve operational efficacy. The proposed changes aim to keep the scheme aligned with market developments, covering aspects such as compensation, business transfer, run-off funding, and policy termination. Stakeholders are encouraged to provide comments by February 16, 2024. The consultation paper is available on the MAS website. 🔗
31. Monetary Authority of Singapore (MAS) – Consultation Paper on Proposed Amendments to the Capital Framework for AES and ACHs 🔗
The Monetary Authority of Singapore (MAS) has released a consultation paper outlining proposed amendments to the current capital framework for Approved Exchanges (AEs) and Approved Clearing Houses (ACHs). The proposed changes aim to ensure the safe and orderly functioning of these institutions, emphasizing their commitment, financial resilience, and ability to recover or wind down in distress situations. MAS plans to implement the new capital framework through a Notice issued under the Securities and Futures Act 2001 (SFA) and intends to specify reporting requirements in the Securities and Futures (Organised Markets) Regulations 2018 and Securities and Futures (Clearing Facilities) Regulations 2013. 🔗
32. Malta Financial Services Authority (MFSA) – Consultation Document on Proposed Amendments to the Pension Rules 🔗
The Malta Financial Services Authority (MFSA) has initiated a consultation to propose amendments to the Pension Rules under the Retirement Pensions Act. The proposed changes address several issues, including the MFSA’s approval process for certain documents, subordinated loan agreements for service providers, declaration and distribution of dividends by Retirement Scheme Administrators, clarification of the Rule related to the 20% investments’ sub-funds or fund, and amendments to the Pension Rules concerning Programmed Withdrawals. 🔗
33. Malta Financial Services Authority (MFSA) – Consultation Document on Proposed Amendments to the Insurance Rules and the Insurance Distribution Rules 🔗
The Malta Financial Services Authority (MFSA) is undertaking a periodic review of the Insurance Rules and Insurance Distribution Rules. Based on findings from regulatory work and feedback received from the market during their operations, the MFSA is proposing amendments to Chapters 4, 5, 8, 9, and 12 of the Insurance Rules, and Chapters 1, 4, 6, and 7 of the Insurance Distribution Rules. The proposed amendments aim to address identified issues and improve the regulatory framework. Interested parties are encouraged to review the proposed changes and provide feedback to the MFSA during the consultation period. 🔗
34. Australian Treasury – Consultation on Proposed Amendments to Corporate Collective Investment Vehicle (CCIV) Regulations 🔗
The Australian government is soliciting feedback on a proposed licensing framework for payment service providers (PSPs) as part of Payments System Modernisation. The consultation, lasting until February 2, 2024, builds on the first paper released in June 2023, focusing on the proposed list of payment functions to be licensed. The updated framework introduces regulatory requirements for enhanced access to payment systems, graduated regulations for stored-value facilities (including payment stablecoins), an industry standard-setting framework, and a new rule-making power for the introduction of a mandatory revised e-Payments code to enhance consumer protections. 🔗
35. United Nations Environment Programme Finance Initiative (UNEP FI) – Policy Engagement Guidelines 🔗
UNEP FI has released Policy Engagement Guidelines, directing members and external net-zero asset owners to align policy engagement practices with their climate commitments. The guidelines emphasize accountability, active assistance to policymakers, consistency with individual net-zero commitments, and transparency in engagement with public policy debates. By implementing these guidelines, members aim to fulfill the recommendation of the Secretary-General’s High-Level Expert Group on Net-Zero Emissions Commitments, aligning lobbying and advocacy efforts. Additionally, recognizing the significance of aligning asset managers’ policy engagement, the Alliance released a discussion paper in April 2023 to guide members in assessing asset managers’ climate policy engagement activities and stewardship of investees’ policy engagement. 🔗
