The following posts provide a snapshot of the principal U.S., European and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
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Revised EU Guidelines on Fraud Reporting Under the Payment Services Directive Published
01/22/2020
The European Banking Authority has published amendments to the 2018 Guidelines on fraud reporting under the revised Payment Services Directive (known as PSD2). The Regulatory Technical Standards on "strong customer authentication" requirements for payments services providers, setting out the process by which service providers authenticate the identity of customers have applied directly across the EU since September 14, 2019. Following clarifications by the European Commission on the application of SCA to certain transaction types, the EBA has amended the reporting templates linked to the guidelines to cater for reporting of transactions where SCA is not applied for reasons other than an exemption under the SCA RTS. The amendments will apply to the reporting of payment transactions initiated and executed from July 1, 2020.
View the EBA's announcement and the consolidated Guidelines.
View details of the SCA RTS.TOPIC: Payment Services -
UK Conduct Regulator Wants Asset Management Sector to Reflect on Risks to Customers and Markets
01/22/2020
The U.K. Financial Conduct Authority has published two letters addressed to the CEOs of firms in the asset management and funds sectors. The first letter is addressed to CEOs of FCA-authorized firms directly managing mainstream investment vehicles or advising on mainstream investments, excluding wealth managers and financial advisers. The second letter is addressed to CEOs of FCA-authorized firms managing alternative investment vehicles, such as hedge funds or private equity funds, or managing alternative assets directly or advising on these types of investments. The letters follow the FCA's report on its review of how firms in the asset management sector selected and used risk modeling and other portfolio management tools.
Read more. -
EU Proposals to Amend the EU-Wide Stress Test Framework for Banks
01/22/2020
The European Banking Authority has commenced a consultation on proposed changes to the EU-wide stress test framework for banks. The EU-wide stress test contributes to improving the financial resilience of banks. Responses to the consultation may be submitted until April 30, 2020. The EBA is holding a public hearing on the proposals on February 21, 2020. The 2020 EU-wide stress test is going to run under the current framework, the results of which will be published in July 2020.
The EBA is proposing to amend the framework to have two parts. The first would be the supervisory element, based on a common EU methodology. It would include the current constrained bottom-up approach, but also have an option for national regulators to adjust or replace banks' estimates based on top-down models and other tools. The second part would be the bank element and would be based on the same common methodology applied in the supervisory part. However, banks would be given more discretion to calculate their projections, provided an explanation and disclosure of the rational and impact of any deviations is possible. The quality of disclosure of the results would remain high, with only the supervisory leg being amended to limit the quantity of disclosure. Feedback is also sought on the approach to scenario designs.
View the consultation paper and other details. -
UK Conduct Authority to Review Suitability of Retirement Income Financial Advice
01/21/2020
The U.K. Financial Conduct Authority has announced the focus of its second review assessing suitability - advice received by consumers on retirement income. The FCA intends to publish a report on the outcome of the review in 2020. Alongside the announcement, the FCA has published a letter addressed to the CEOs of financial advice firms describing its approach to tackling key areas of concern with financial advice firms and setting out the action it expects these firms to undertake. The letter covers assessing suitability of advice, defined benefit pension transfer advice, pensions and investment scams, adequate financial resources and professional indemnity insurance, the FCA's recently imposed ban on the promotion of speculative mini-bonds to retail consumers, the Senior Managers and Certification Regime and preparing for the end of the Brexit implementation period.
View the FCA's statement.
View the Dear CEO letter. -
Group of Central Banks to Collaborate on Potential of Central Bank Digital Currencies
01/21/2020
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank, the Swiss National Bank and the Bank for International Settlements have announced that they have created a group to share experience as they assess the potential cases for central bank digital currency. The group will assess CBDC use cases, economic, functional and technical design choices, including cross-border interoperability and the sharing of knowledge on emerging technologies.
View the announcement. -
European Central Bank Sets Out Expectations of Eurozone Banks' Dividend and Variable Remuneration Policies
01/21/2020
The Banking Supervision arm of the European Central Bank has set out its expectations of Eurozone banks regarding their dividend distribution and variable remuneration policies. The ECB is responsible for direct prudential supervision of certain significant banks based in the Eurozone as part of the Single Supervisory Mechanism and has certain powers relating to the supervision by national Eurozone regulators of smaller banks. The ECB has published a letter addressed to significant banks warning them to take a "prudent, forward-looking stance" when setting the banks' remuneration policy and has also published a Recommendation (dated January 17, 2020) on requiring significant banks to "establish dividend policies using conservative and prudent assumptions". The Recommendation will apply directly to significant Eurozone banks. The ECB expects national Eurozone regulators to consider how it might be applied proportionally to the smaller banks. The ECB expects Eurozone banks to consider how their variable remuneration policies and dividend distribution policies will impact their ability to continue to meet their regulatory capital requirements, particularly taking into account the transitional provisions of the Capital Requirements Directive (version IV) and the transitional arrangements for mitigating the impact of the introduction of IFRS 9 on own funds.
View the ECB's letter.
View the ECB's Recommendation. -
European Central Bank Consults on Proposed Guidelines on Materiality Threshold for Credit Obligations Past Due for Small Eurozone Banks
01/20/2020
The European Central Bank has opened a consultation on proposed guidelines on the materiality threshold for credit obligations past due for less significant institutions based in the Eurozone. The EU Capital Requirements Regulation risk quantification provisions set out that a default occurs when an obligor is past due more than 90 days on any material credit obligation to a firm, its parent or any of its subsidiaries. The materiality of the credit obligation is to be assessed against a threshold set by the national regulator according to its view of a reasonable level of risk. The ECB is responsible for direct prudential supervision of certain significant banks based in the Eurozone as part of the Single Supervisory Mechanism and has set the materiality threshold for these firms. The proposed guidelines are addressed to national Eurozone regulators within the SSM responsible for setting the threshold for less significant institutions. The ECB is proposing a single materiality threshold for all less significant institutions, both for retail and non-retail exposures.
The consultation closes on February 17, 2020.
View the consultation paper. -
UK Proposals for Confirmation of Payee Exemptions
01/20/2020
The U.K. Payment Systems Regulator has opened a consultation on proposals to vary its Specific Direction 10 on Confirmation of Payee. Confirmation of Payee is a system that ensures that certain identifiers (including name, sort code and account number) of a payee are verified against the records of a payment services provider before a payment is made. On August 1, 2019, the PSR issued Specific Direction 10 to certain institutions within the six largest U.K. payment service providers - Lloyds Group, Barclays Group, HSBC Group, Royal Bank of Scotland Group, Santander Group and Nationwide Building Society - requiring them to implement "Confirmation of Payee" by March 31, 2020. The PSR is consulting on amending the Direction to introduce a new basis for a payment service provider to request an exemption from the requirements. The existing text of the Direction only allows exemptions in exceptional circumstances. The PSR also intends to include a limited exemption for HSBC UK Bank plc in the revised Direction. Responses to the consultation can be submitted until January 29, 2020.
View the consultation.TOPIC: Payment Services -
Proposed EU Guidelines for Securitization Repositories Assessing Data Completeness and Consistency
01/17/2020
The European Securities and Markets Authority has launched a consultation on proposed guidelines on securitization repository data completeness and consistency thresholds. The proposed guidelines would apply to EU securitization repositories that are registered with and supervised by ESMA. The consultation closes on March 16, 2020.
Read more. -
UK Court Confirms Bitcoin Status as Property for Certain Proprietary Claims
01/17/2020
A U.K. court has granted an interim proprietary injunction over Bitcoin held in an account of a cryptocurrency exchange after it had been transferred there as part of a cyber attack on a Canadian insurance company. The judgment in AA v Persons Unknown & Ors, Re Bitcoin [2019] EWHC 3556 (Comm) was given on December 13, 2019, and following the lifting of reporting restrictions, was released for publication on January 17, 2020. In coming to its decision, the High Court adopted the analysis as to the proprietary status of crypto assets set out in the recent legal statement by the UK Jurisdiction Taskforce. Although each case will depend on the relevant facts and issues, the decision confirms that crypto assets are a form of property capable of being the subject of a proprietary injunction.
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Global Financial Innovation Network Announces Plans to Improve the Framework for Cross-Border Testing of Innovative Firms
01/16/2020
The Global Financial Innovation Network has published a report on lessons learned during the cross-border testing of innovative firms and their products. The GFIN was launched at the start of 2019 and is a network of organizations committed to supporting financial innovation in the interests of consumers. One of GFIN's priorities is to facilitate cross-border trials of emerging technologies across global jurisdictions (a global sandbox). The GFIN began a pilot with eight firms in April 2019, which aimed to develop testing plans for their cross-border trials. However, as none of the firms developed a testing plan that satisfied each jurisdiction's requirements, the GFIN could not progress things further. The GFIN has since met to consider how to take things forward and will further develop the framework of cross-border testing.
The report describes the accomplishments and the challenges that arose during the pilot and sets out the proposed next steps and solutions to improve cross-border testing for the next phase. The solutions include establishing a central website for GFIN and creating a single application form for applicants, both of which should make it easier for prospective firms to find relevant information and submit an application. In the first half of 2020, the GFIN will open applications for the first formal cohort of participants.
View the report.TOPIC: FinTech -
International Organization of Securities Commissions Recommends UTC Clock Synchronization to Facilitate Market Abuse Monitoring
01/16/2020
The International Organization of Securities Commissions has published a report in which it recommends that where jurisdictions require clock synchronization for trading purposes, clocks should be synchronized to Coordinated Universal Time (UTC). In its 2013 report - Technological Challenges to Effective Market Surveillance – Issues and Regulatory Tools (FR04/13) – IOSCO recommended the introduction of a requirement for trading venues and their participants to synchronize the business clocks used to record the date and time of a reportable event. The practice assists regulators in monitoring the markets for market abuse and identifying market abuse. Certain jurisdictions have already implemented clock synchronization according to UTC, including Australia, Canada and the EU.
View IOSCO's report. -
UK Regulators Push For More Action on LIBOR Transition
01/16/2020
The Bank of England, U.K. Prudential Regulation Authority, U.K. Financial Conduct Authority and the Working Group on Sterling Risk-Free Reference Rates have published a set of documents outlining priorities and milestones for 2020 on LIBOR transition.
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Mark Carney Appointed as Finance Adviser to UK Government on Sustainable Finance
01/16/2020
Mark Carney, the outgoing Governor of the Bank of England, has been appointed as Finance Adviser for COP26. The role will be to assist the U.K. Government to build a sustainable financial system that supports the transition to a net zero economy. Andrew Bailey will replace Mr. Carney as the Governor of the Bank of England from March 16, 2020.
Read more.TOPIC: People -
European Commission Announces Next Steps for Sustainable Finance
01/16/2020
The European Commission has published a Communication detailing the Sustainable Europe Investment Plan that will support the European Green Deal Investment Plan. The Communication is accompanied by a proposed Regulation to establish a Just Transition Fund and a Factsheet explaining the Plan. Feedback on the proposed Regulation can be submitted until March 12, 2020.
Read more.TOPIC: Sustainable Finance -
UK Conduct Authority Publishes Findings of Review of Risk Modelling and Other Portfolio Management Tools in the Asset Management Sector
01/13/2020
The U.K. Financial Conduct Authority has published a report on its review of how firms in the asset management sector selected and used risk modelling and other portfolio management tools. The review was undertaken to assess how firms identify and manage the risks as well as firms' ability to respond to system failures or service interruptions.
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European Banking Authority Publishes Report on Big Data and Advanced Analytics
01/13/2020
The European Banking Authority has published a report on big data and advanced analytics in the banking sector. The report sets out the findings of the EBA's review of big data and analytics and presents key pillars and elements of trust for the development, implementation and adoption of BD&AA by banks.
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European Systemic Risk Board Recommends Options for Addressing Procyclicality in Derivatives Markets and Securities Financing Transactions
01/09/2020
The European Systemic Risk Board has published a report on mitigating the procyclicality of margins and haircuts in derivatives markets and securities financing transactions. The report assesses the systemic risks arising from procyclicality associated with margin and haircut practices and makes recommendations for addressing the risks.
Read more.TOPIC: Derivatives -
Bank of England and UK Conduct Regulator Announce Proposals for Financial Sector Data Reforms
01/07/2020
The Bank of England and U.K. Financial Conduct Authority have published a series of proposals setting out their plans to enhance their data and analytics capabilities. The proposals include a revised FCA data strategy, a BoE discussion paper on transforming data collection and a viability report published by the FCA and BoE, together with seven regulated firms, on the possibilities of digital regulatory reporting. The FCA and BoE depend on data to conduct their supervisory responsibilities.
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European Securities and Markets Authority Publishes Evidence on Market Impacts of Circuit Breakers
01/07/2020
The European Securities and Markets Authority has published a working paper setting out its findings on the market impacts of “circuit breakers”, instruments used by trading venues to interrupt excessive price movements in financial instruments. The revised Markets in Financial Instruments Directive places obligations on national regulators to require a regulated market in their jurisdiction to be able to temporarily halt or constrain trading if there is significant price movement in a financial instrument on that market during a short period and, in exceptional cases, to be able to cancel, vary or correct any transaction.
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European Securities and Markets Authority Publishes Clarifications on Reporting of Securities Financing Transactions
01/06/2020
The European Securities and Markets Authority has published a final report and guidelines on reporting under the Securities Financing Transaction Regulations, together with amended SFTR validation rules and a statement on Legal Entity Identifiers. The SFTR requires all securities financing transactions to be reported to EU-recognized trade repositories. SFTs involve the use of securities to borrow cash or other high investment-grade securities and include repurchase transactions, securities lending and sell/buy backs.
Read more.TOPIC: Derivatives -
European Securities and Markets Authority Publishes Follow-Up Report on Credit Rating Agency and Trade Repository Fees
12/20/2019
The European Securities and Markets Authority has published a follow-up report on its 2018 Thematic Report on the fees charged by credit rating agencies and trade repositories. ESMA directly supervises all CRAs and trade repositories that are established in the EU. The 2018 Thematic Report highlighted three key areas of concern in the fee charging practices of CRAs and trade repositories, namely: (i) transparency and disclosure to clients and ESMA of fees; (ii) the process of setting fees; and (iii) how interactions with other group entities may pose challenges to the principles of non-discrimination and cost-related fees to which credit rating agencies and trade repositories are expected to adhere.
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UK Chancellor Appoints New Governor of Bank of England
12/20/2019
The U.K. Chancellor of the Exchequer, Sajid Javid, has announced the appointment of Andrew Bailey as the new Governor of the Bank of England.
Read more.TOPIC: People -
Financial Stability Board Publishes Feedback to Resolution Planning Disclosures Consultation
12/20/2019
The Financial Stability Board has published a statement summarizing the feedback it received to its June 2019 consultation on firms’ public disclosures on resolution planning and resolvability. The consultation sought feedback on a series of questions regarding general and firm-specific disclosures made by systemically important banks and other firms subject to resolution planning requirements.
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Financial Stability Board Publishes Feedback to Derivatives and Trading Portfolios’ Solvent Wind-Down Consultation
12/20/2019
The Financial Stability Board has published a statement summarizing the feedback it received to its June 2019 consultation on the solvent wind-down of derivatives and trading portfolios. The consultation sought feedback on a series of questions regarding existing wind-down practices that may be used as a recovery option for global systemically important institutions that find themselves under stress. The FSB intended to consider publishing guidance on solvent wind-down planning depending on the responses elicited by the consultation.
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UK Secondary Legislation Published Implementing EU Fifth Money Laundering Directive
12/20/2019
The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 have been published, amending the existing Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The amending Regulations incorporate changes made to EU legislation under the EU’s Fifth Anti-Money Laundering Directive. The majority of the amending Regulations provisions will come into force on January 10, 2020, with the exception of those governing: (i) customer due diligence on anonymous prepaid cards; and (ii) requests for information about accounts and safe-deposit boxes, which will come into force on July 10, 2020 and September 10, 2020 respectively.
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EU Publishes Handbook for Climate Benchmarks
12/20/2019
The EU Technical Expert Group on Sustainable Finance has published a Handbook providing guidance on the EU’s new climate transition benchmarks (EU CTB) and Paris-aligned benchmarks (EU PAB), as well as on the environmental, social and governance disclosures that will be applicable to all investment benchmarks (other than currency and interest rate benchmarks) in the future. Conventional benchmarks do not typically reflect low-carbon considerations, but an increasing focus on sustainability has led to a proliferation in recent years of specific low-carbon benchmarks that were not subject to clear or comparable standards.
Read more.TOPIC: Sustainable Finance -
EU Political Agreement on Proposed Regulation on Cross-Border Crowdfunding Service Providers
12/19/2019
The EU legislative bodies have announced that political agreement has been reached on the proposed Regulation on European Crowdfunding Service Providers for Business. The proposed ECSP Regulation is part of the EU Capital Markets Union initiative and the Commission's FinTech Action Plan. It aims to increase access to finance through crowdfunding for innovative companies, start-ups and SMEs. The European Commission published the original legislative proposal on March 8, 2018. Since then, the text of the proposed ECSP Regulation has been amended.
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Financial Stability Board Assesses Financial Stability Implications of Expanding Leveraged Loans and Collateralized Loan Obligations Markets
12/19/2019
The Financial Stability Board has published a report on the vulnerabilities associated with leveraged loans and collateralized loan obligations. In the report, the FSB assesses how the leveraged loan and CLO markets have developed and analyzes the potential implications for global financial stability.
Noting that there are data gaps, the FSB makes the following conclusions:- there are indications that weaknesses in the leveraged loan and CLO markets have increased since the 2008-09 global financial crisis;
- banks have the largest direct exposures to leveraged loans and CLOs. These exposures are concentrated among a limited number of large global banks and have a significant cross-border dimension; and
- non-bank investors, such as investment funds, insurance companies, pension funds, broker-dealers and holding companies, also have exposures to leveraged loans and CLOs.
The FSB intends to consider whether there is scope to close data gaps, but will continue to analyze the financial stability risks and will examine the regulatory and supervisory implications related to leveraged loans and CLOs.
View the report.TOPIC: Securities -
European Banking Authority Launches Consultation on Draft Technical Standards Identifying Material Risk Impact Staff Subject to Compensation Requirements
12/19/2019
The European Banking Authority has launched a consultation on its draft Regulatory Technical Standards setting out the criteria for identifying staff whose professional activities have a material impact on credit institutions’ risk profiles. The EBA is required to produce the RTS under the revised Capital Requirements Directive (CRD V), in support of the CRD requirement that remuneration policies for staff whose professional activities have a material impact on the credit institution’s risk profile are appropriate to the size, nature and complexity of the credit institution in question.
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European Commission Launches Consultations on Digitalization in the Financial Sector
12/19/2019
The European Commission has launched two consultations on digitalization in the financial sector. They form part of the EU’s new Digital Finance Strategy which aims to deepen the Single Market for digital financial services, promote a data-driven EU financial sector while addressing the risks inherent in that and enhance the digital operational resilience of the financial system.
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Consultation on Credit Adjustment Spread Methodologies for Fallbacks in Cash Products Referencing GBP LIBOR
12/19/2019
The Working Group on Sterling Risk-Free Reference Rates has opened a consultation on credit adjustment spread methodologies for fallbacks in cash products referencing GBP LIBOR. The consultation focuses on cash products, including, but not limited to, syndicated loans, floating rate notes, retail loans, bilateral corporate loans and securitizations. It only covers GBP LIBOR and credit adjustment spreads to be applied to a SONIA-derived rate. Responses to the consultation can be submitted until February 6, 2020.
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European Banking Authority Publishes Final Technical Standards for the Standardized Approach to Counterparty Credit Risk
12/18/2019
The European Banking Authority has published final draft Regulatory Technical Standards governing the standardized approach to counterparty credit risk in derivatives transactions. The final draft SA-CCR RTS will supplement the requirements set out in the EU's Capital Requirements Regulation, as amended by CRR 2. The SA-CCR requirements aim to address the shortcomings of existing calculation methods to ensure parties are adequately protected in the event of default by a counterparty to a derivatives transaction and these final draft RTS aim to ensure a more harmonized calculation of own funds requirements for counterparty credit risk than has been the case under CRR.
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Bank of England Consults on Proposed 2021 Climate Change Stress Tests
12/18/2019
The Bank of England has published a discussion paper seeking feedback on its proposals for a series of 2021 stress-tests on climate-related risks for the largest banks, insurers and the financial system. The stress tests will help to quantify potential climate change risks faced by the financial system and enable market participants and oversight bodies like the BoE to develop measures to prepare for those risks. Responses to the consultation should be submitted by March 18, 2020. The final stress testing framework will be published in the second half of 2020 with the results of the exercise published in 2021.
Read more. -
EU Recommendations to Combat Undue Short-Term Pressure From Financial Sector on Corporates
12/18/2019
The European Supervisory Authorities have each published advice to the European Commission on undue short-term pressure from the financial sector on corporations. The ESAs comprise the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority. The ESAs' advice responds to the European Commission's request in June 2019 for evidence and possible advice on potential undue short-term pressure by financial service participants on corporations. The Commission asked the ESAs to: (i) provide evidence of any short-termism and, if any, the consequences thereof; (ii) assess the drivers of such short-termism, including the effects of regulation on financial market participants, for example, the guidance on remuneration practices; (iii) identify existing regulations that either mitigate or exacerbate short-term pressures; and (iv) evaluate the need for regulatory or policy action and propose specific areas where action is needed. The ESAs' advice, summarized below, may result in the Commission proposing amendments to several pieces of EU legislation, such as the Capital Requirements Directive and related Regulation, the Markets in Financial Instruments package and the Non-Financial Reporting Directive.
Read more. -
International Swaps and Derivatives Association Consults on Fallbacks Based on Alternative Risk-Free Rates For Derivatives Referencing EUR Libor and EURIBOR
12/18/2019
The International Swaps and Derivatives Association has launched a consultation in which it proposes to amend its standard documentation to implement fallbacks based on alternative risk-free rates for certain key Interbank Offered Rates - EUR LIBOR and EURIBOR. ISDA states that the back-ups will apply if the relevant IBOR is permanently discontinued, based on defined triggers. Responses to the consultation should be submitted to ISDA by January 21, 2020.
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UK Prudential Regulatory Authority Responds on Prudential Impediments for Banks Arising from the LIBOR Transition
12/18/2019
The Prudential Regulation Authority has published a letter addressed to the Chair of the Working Group on Sterling Risk-Free Reference Rates. The letter responds to the Working Group's letter in October 2019 requesting regulatory forbearance or clarification from regulators on the impact that the LIBOR transition is likely to have on the prudential requirements for banks. The main issues raised by the Working Group include: (i) the potential for certain capital instruments to no longer qualify as regulatory capital; (ii) the potential for securitizations and MREL-eligible instruments to be considered as "new contracts" as a result of changes to contractual terms, leading to the need to insert bail-in or other bank recovery contractual terms; and (iii) that many banks will need to obtain regulatory approvals for alterations to the models used to determine their regulatory capital arising from their exposures and risks.
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Financial Stability Board Calls for Sustained Efforts to Migrate From LIBOR
12/18/2019
The Financial Stability Board has published a progress report on reforms to major interest rate benchmarks. The report provides the FSB's annual update on progress taken by the official sector and market participants to move from interbank offered rates to overnight risk-free rates by the end of 2021 in line with the FSB's 2014 recommendations. The FSB highlights that the continued reliance by global financial markets on LIBOR poses significant financial stability risks and urges all participants to continue with their efforts to transition to the alternative risk-free rates. The FSB also warns regulated firms to expect increased examination from regulators of their efforts to transition as the end of 2021 approaches.
View the report. -
EU Regulation and Directive on Covered Bonds Published
12/18/2019
A new Regulation and Directive amending certain provisions of the Capital Requirements Regulation on covered bonds and introducing standards on the issuance of covered bonds and covered bond public supervision has been published in the Official Journal of the European Union. The Regulation and Directive will both enter into force on January 7, 2020. The Regulation will apply directly in all Member States from July 8, 2022, while Member States must publish national legislation implementing the Directive by July 8, 2021 and must apply that legislation from July 8, 2022.
Read more.TOPIC: Securities -
UK Prudential Regulator Finalizes Revisions to Pillar 2 Liquidity Reporting Frequency
12/17/2019
The U.K. Prudential Regulatory Authority has published a Policy Statement, revised reporting rules and a revised Supervisory Statement on the PRA's approach to supervising liquidity and funding risks (SS 25/15).
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Financial Stability Board Publishes 2020 Work Program
12/17/2019
The Financial Stability Board has published its work program for 2020. The FSB confirms that it will continue to monitor developments to identify and manage new and emerging risks, work to finalize the outstanding components of the post-crisis reforms and assess the implementation of reforms as well as their effects. Key areas of focus will be:- LIBOR transition: the FSB will monitor implementation of the benchmark reforms and report on outstanding issues.
- Global stablecoins: the FSB will launch a consultation on global stablecoins in April 2020.
- Global payment systems: the FSB will work with other international bodies to develop and deliver a roadmap for using digital innovations to improve global cross-border payments.
- FinTech: the FSB will report on the perspective of emerging market and developing economies.
View the FSB work program for 2020. -
UK Financial Policy Committee Highlights Risks of Open-Ended Funds and Global Stablecoins
12/16/2019
The Financial Policy Committee of the Bank of England has published its latest financial stability report. The report sets out the FPC's view of the resilience of the U.K. financial system and the main risks to the U.K.'s financial stability as well as the work being carried out to address those risks. The FPC states that the 2019 annual cyclical scenario stress test indicates that the U.K. banking system would be resilient to deep simultaneous U.K. and global recessions. Furthermore, the U.K. financial system is resilient to and prepared for any disruptions that may arise from a disorderly Brexit.
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International Organization of Securities Commissions Consults on Combating Conduct Risks in Debt Capital Raising
12/16/2019
The International Organization of Securities Commissions has launched a consultation on methods of addressing potential conflicts of interest and other conduct risks that arise from market intermediaries’ participation in the debt capital raising process. Responses should be submitted by February 16, 2020.
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European Supervisory Authorities Publish Guidelines on AML/CTF Cooperation
12/16/2019
The European Banking Authority, European Insurance and Occupational Pensions Authority and European Securities and Markets Authority (collectively known as the European Supervisory Authorities) have published joint guidelines aimed at enhancing cooperation between national regulators in combating anti-money laundering and counter-terrorist financing. The EU Fourth Money Laundering Directive requires national regulators to cooperate in their AML/CTF supervision of entities that operate on a cross-border basis.
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UK Conduct Regulator Publishes Feedback on Climate Change and Green Finance Projects
12/16/2019
The U.K. Financial Conduct Authority has published a feedback statement on its proposals for improving climate change disclosures and the information given to consumers about green financial products and services. The feedback statement follows the FCA’s discussion paper on climate change and green finance, in which it sought comments on potential changes to its regulatory approach in these areas.
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European Securities and Markets Authority Publishes Information on Pending Applications for Benchmark Administrators
12/13/2019
The European Securities and Markets Authority has published a list of the entities that are awaiting their national regulator’s approval for authorization and registration as EU benchmark administrators. Under the EU Benchmark Regulation, existing EU and third country benchmark administrators are entitled to apply for authorization to continue as administrators.
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EU Expert Group on Regulatory Obstacles to Financial Innovation Publishes Recommendations on Regulatory Framework for FinTech
12/13/2019
The EU Expert Group on Regulatory Obstacles to Financial Innovation (or ROFIEG) has published a set of Recommendations and a Q&A on the establishment of an accommodative framework for FinTech in the EU. The ROFIEG was established by the European Commission in 2018 to provide expertise on technology in the financial services sector and, in particular, to review the EU’s legal and regulatory FinTech framework.
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International Organization of Securities Commissions Publishes Framework for Monitoring Leverage in Funds
12/13/2019
The International Organization of Securities Commissions has published a framework designed to facilitate regulators’ monitoring of leverage in investment funds, assisting regulators in identifying potential risks to financial stability.
Read more.TOPIC: Funds -
EU Report on Accepted Market Practices Under the Market Abuse Regulation
12/13/2019
The European Securities and Markets Authority has published an annual report to the European Commission on the application of accepted market practices under the Market Abuse Regulation. The Market Abuse Regulation provides certain prohibitions against market manipulation. Accepted market practices, which are established by national regulators and notified to ESMA, provide a defense against any allegations of market manipulation.
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Proposed EU Procedural Rules for Penalties Imposed on Third-Country CCPs, Trade Repositories and Credit Rating Agencies
12/13/2019
The European Securities and Markets Authority has launched a consultation on proposed procedural rules for penalties imposed on third-country CCPs, trade repositories and credit rating agencies. Responses are invited by January 18, 2020. ESMA intends to finalize its technical advice by the end of Q1 2020.
Read more.