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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.

  • Kalifa Review of UK Fintech Published
    02/26/2021

    HM Treasury has published the highly-anticipated Independent Strategic Review of U.K. Fintech, led by Ron Kalifa OBE. The aim of the recommendations is to, among others, ensure the U.K.'s competitiveness, attract investments for individual fintechs and raise the U.K.'s status as a global hub. The Kalifa Review makes recommendations in five key areas: (i) policy and regulation; (ii) skills and talent; (iii) investment; (iv) international attractiveness and competitiveness; and (v) national connectivity. The delivery of these recommendations is to be led by the Centre for Finance, Innovation and Technology, which is mandated by the Government but led by the private sector. This post focuses on the policy and regulation discussion.

    Read more.
  • European Banking Authority Publishes Opinion on Removal of Obstacles to Account Access Under Revised Payment Services Directive
    02/22/2021

    The European Banking Authority has published an Opinion requiring EU national regulators to assess the steps taken by account servicing payment services providers to remove obstacles to the provision of account information services and payment initiation services by third-party providers.

    Read more.
  • EU Launches Review of the Financial Collateral Directive
    02/12/2021

    The European Commission has launched a targeted consultation related to post-trade services, which considers the EU Financial Collateral Directive. The Commission is also consulting on the Settlement Finality Directive, combining the review of these two Directives since they are closely related. The consultations close on May 7, 2021. The FCD establishes a harmonized EU framework for the use of financial collateral to secure transactions. It provides for close-out netting provisions to be enforceable under their terms and ring-fences the operation of financial collateral arrangements should one of the parties become insolvent, creating protections from the usual insolvency laws of a Member State. The FCD consultation does not cover the re-use of financial collateral given under a security financial collateral arrangement by a collateral taker as this issue has recently been addressed in the Securities Financing Transactions Regulation. The consultation focuses on issues relating to the recognition of close-out netting provisions and its impact on SFD systems.

    Read more.
  • EU Launches Review of the Settlement Finality Directive
    02/12/2021

    The European Commission has launched a targeted consultation related to post-trade services, which considers the EU Settlement Finality Directive. The Commission is also consulting on the Financial Collateral Directive, combining the review of these two Directives since they are closely related. The consultations close on May 7, 2021. The SFD establishes various insolvency carve-outs for designated market infrastructure systems and provides for finality of transactions within such systems. Under the protections currently afforded by the SFD, transfer orders which enter into designated systems within certain deadlines are guaranteed to be finally settled and cannot be unwound at the behest of insolvency officials, regardless of whether the sending participant has become insolvent or transfer orders have been revoked in the meantime. The SFD essentially excludes "insolvency claw-back" rules, such as those for transactions at an undervalue or trading by insolvent or near-insolvent entities, from applying to holdings in designated systems and modifies the timing of "moratorium" rules which prevent transactions by insolvents. This also gives certainty as regards holdings in central securities depositories and as to the finality of transactions in some clearing and payment systems. Under the SFD, each EU Member State automatically recognizes systems that have been designated by other Member States. However, there is no EU regime for third country systems, a lacuna which has already been fixed by the U.K. in its SFD laws after Brexit.

    Read more.
  • UK Payment Services Regulator Consults on Delivery and Regulation of the UK's New Payments Architecture
    02/05/2021

    The U.K. Payment Systems Regulator has opened a consultation on the delivery and regulation of the U.K.'s New Payments Architecture. The NPA will reorganize the clearing and settlement of most of the U.K.'s domestic interbank payments, including payments that currently use the BACS and Faster Payments systems. The PSR consulted last year on issues relating to competition and innovation in payment services and remains concerned about these issues. The PSR is also concerned that the current NPA programme will not provide value for money and will delay the achievement of the benefits of the NPA. The PSR is therefore seeking views on its proposals to reduce these risks to the successful delivery of the NPA. The proposals include narrowing the scope of the initial contract for delivery to those services that support the replacement and upgrade of Faster Payments and on ways to mitigate the risks to competition and innovation, including procurement, contractual provisions and governance provisions. Responses to the proposals on reducing the risk to delivery of the NPA may be submitted until March 19, 2021 and responses to the proposals on mitigating competition issues may be submitted until May 5, 2021.

    View the PSR's consultation paper on delivery of the NPA.

    View details of the PSR's consultation on competition and innovation.
  • UK Regulator Proposes Amendments to UK Technical Standards on Secure Customer Authentication
    01/28/2021

    The U.K. Financial Conduct Authority has launched a consultation on proposed changes to the U.K. Regulatory Technical Standards on secure customer authentication and common and secure methods of communication and on proposed payments-related amendments to the Perimeter Guidance Manual and the FCA Payment Services and Electronic Money Approach Document. The proposals are relevant for payment service providers, e-money issuers, payment institutions, e-money institutions and registered account information service providers (AISPs). Responses to the consultation may be submitted until February 24, 2021, for issues relevant to contactless payments, and until April 30, 2021 for the remaining proposals.

    Read more.
  • UK Government Proposes Extending Regulatory Perimeter to Capture Stablecoins
    01/07/2021

    HM Treasury has opened a consultation on the proposed U.K. approach to crypto-assets and stablecoins, in particular a proposal to bring stablecoins into the U.K. regulatory perimeter. Responses to the consultation may be submitted until March 21, 2021. The government will consider the responses to the consultation and publish a response with further details on how the approach would be implemented in law. If the policy approach is followed, the regulators would consult further on rules for firms.

    Read more.
  • HM Treasury Consults on Insolvency Changes for Payment and Electronic Money Institutions
    12/03/2020

    HM Treasury has launched a consultation on the U.K. Government's proposed Special Administration Regime for payment institutions and electronic money institutions that fall within the scope of the Payment Services Regulations 2017 and the Electronic Money Regulations 2011. The SAR would address shortcomings of the existing insolvency regime for PIs and EMIs and would apply alongside Part 24 of the Financial Services and Markets Act 2000, which would also be extended to apply in full to PIs and EMIs. Responses to the consultation should be submitted by January 14, 2021.

    Read more.
  • EU Consultation on Proposed Revisions to the Guidelines on Major Incident Reporting for Payment Service Providers
    10/14/2020

    The European Banking Authority has opened a consultation on proposed revisions to the Guidelines on major incident reporting under the revised Payment Services Directive. PSD2 requires payment services providers to establish and maintain effective incident management procedures for, among other things, detecting and classifying major operational or security incidents. PSPs are required to notify their home state regulator if a major incident occurs. The Guidelines, which have applied across the EU since January 1, 2018, stipulate the criteria that PSPs should use to classify an operational or security incident as "major." Major incidents must be reported to a PSP's national regulator using the format provided in the Guidelines. The EBA is consulting on targeted amendments to the Guidelines. Responses to the consultation may be submitted until December 14, 2020. The EBA expects that the revisions to the Guidelines will become applicable by Q4 2021.

    Read more.
  • Final Roadmap for Enhancing Cross-Border Payments Published by the Financial Stability Board
    10/13/2020

    The Financial Stability Board has published a Roadmap for enhancing cross-border payments. The Roadmap is the final stage in the G20's three-stage process to enable countries to enhance their cross-border payments systems. The FSB published the Stage 1 report in April 2020, which identified existing challenges in cross-border payments systems and specified key "frictions" in the cross-border payments system that contribute to these challenges. The Stage 2 report, published by the Committee on Payments and Market Infrastructures in July 2020, covered the 19 building blocks where further public and private sector work would enhance cross-border payments and address the frictions ascertained by the FSB.

    Read more.
  • Financial Stability Board Publishes Final Recommendations on Global Stablecoins
    10/13/2020

    Following its consultation earlier this year, the Financial Stability Board has published a final report on the regulation, supervision and oversight of global stablecoin arrangements. In the report, the FSB discusses the characteristics of GSCs, the risks posed by GSCs, existing approaches to regulating and supervising GSCs and issues with cross-border supervision of GSCs. Alongside the report, the FSB has published a summary of the responses to its consultation.

    Read more.
  • EU Technical Standards Published on Central Contact Points Under the Revised Payment Services Directive
    10/09/2020

    A Commission Delegated Regulation setting out Regulatory Technical Standards on central contact points under the revised Payment Services Directive has been published in the Official Journal of the European Union. The RTS apply where a payment institution or electronic money institution with its head office in one EU member state provides payment services on a cross-border basis, under the right of establishment, through agents in another (host) member state. PSD2 gives the national regulators in the host member state the option of requiring that payment institutions or electronic money institutions operating through agents must establish a central contact point in the host territory to ensure adequate communication and information reporting and effective supervision.

    Read more.
  • EU Report on the Potential for a Digital Euro
    10/02/2020

    The European Central Bank has published a report by the Eurosystem High-Level Task Force on a digital euro. The digital euro would be a form of central bank digital currency. No decision has been taken yet to issue a digital euro. The report sets out the reasons for having a digital euro, the potential impact of a digital euro, legal considerations, functional design possibilities and technical and operational approaches to digital euro services. A consultation on the potential launch of a digital euro is expected in October 2020.

    The Bank of England issued a discussion paper in March 2020 on the opportunities, challenges and design of a potential U.K. CBDC. The ECB and the BoE are two of the central banks that are investigating the potential of CBDCs. Other central banks include the Bank of Canada, the Bank of Japan, the Sveriges Riksbank, the Swiss National Bank and the Bank for International Settlements.

    View the ECB's report on a digital euro.
  • European Commission Sets out EU Retail Payments Strategy
    09/24/2020

    The European Commission has published a Communication on its EU retail payments strategy for the coming years. The payments sector has experienced significant change in recent years. Retail payments are increasingly dematerialized and disintermediated, with large technology companies playing a more significant part in the payments sector. The EU payments market is also largely fragmented along national borders, leading to a small number of large firms providing cross-border services and inhibiting domestic FinTechs. The Commission's strategic objective is to establish a clear EU policy framework for retail payments that manages the risk of inconsistencies and market fragmentation across the EU.

    Read more.
  • European Banking Authority Seeks to Promote RegTech Use
    08/12/2020

    The European Banking Authority has opened a consultation on RegTech and supporting the use of RegTech across the EU. Responses may be submitted until September 30, 2020. The EBA intends to report on the use of RegTech in the first half of 2021. The survey is focused on financial institutions and ICT third party providers. The EBA is seeking to understand the extent and impact of RegTech for regulatory, compliance and reporting requirements of regulated firms. In particular, the EBA is looking at mapping and understanding existing RegTech solutions, identifying barriers and risks relating to the use of RegTech and analyzing how to facilitate the application of RegTech across the EU. The consultation covers ongoing monitoring of business relationships and transactions for anti-money laundering obligations, creditworthiness assessments, compliance with security standards, including information security, cybersecurity and payment services and supervisory reporting.

    View the EBA's survey.
  • UK Government Launches Payments Landscape Review
    07/28/2020

    HM Treasury has launched a call for evidence on the U.K.'s payments landscape, which is the first stage of the Payments Landscape Review announced in June 2019. The government is seeking input on the opportunities, gaps and risks that need to be addressed to support the U.K.'s position as being at the forefront of payments technology. Responses may be submitted until October 20, 2020. The government will publish a summary of the responses it receives and set out next steps for the review.

    In the call for evidence, the government sets out the steps taken to achieve the aims that were published in 2012 to support the high-level strategy of ensuring that end user consumers and businesses benefit from the U.K. payment networks. Feedback is sought on the extent to which those aims have been achieved.

    HM Treasury also discusses the main incentives for new payment systems and services, covering the New Payments Architecture, Faster Payments, the impact of Open Banking on how the systems are used, trends towards new service providers and payment chains and development in cross-border payments. The call for evidence also reflects on the wider work being undertaken on crypto-assets and stablecoins.

    View the call for evidence on the U.K.'s payments landscape.
  • Stage 2 Report on Enhancing Cross-Border Payments Published
    07/13/2020

    The Committee on Payments and Market Infrastructures has published a report on enhancing cross-border payments and building blocks of a global roadmap. The report forms the second stage of the G20’s three-stage process to develop a roadmap that will enable countries to enhance their cross-border payments systems. The Financial Stability Board published the Stage 1 report in April 2020, which identified existing challenges in cross-border payments systems and specified key “frictions” in the cross-border payments system that contribute to these challenges. The third stage will involve coordination between the FSB and CPMI, together with other international organizations, to compile a roadmap for implementing the improvements. The FSB published a statement welcoming the CMPI report and confirmed that it intends to publish the Stage 3 report, which will be the roadmap for enhancing cross-border payments, in October.

    Read more.
  • UK Payment Systems and Conduct Regulators Publish Joint Statement on Access to Cash
    06/16/2020

    The U.K. Payment Systems Regulator and U.K. Financial Conduct Authority have published a joint statement on their approach to maintaining access to cash for those that need it in light of bank branch and cash machine closures due to COVID-19. The regulators have adopted a series of actions, including mapping which regions have seen branch and cash machine closures, working with banks, building societies, the Post Office and Link to ensure access to these facilities is re-established as soon as possible and focusing on the needs of vulnerable consumers who require ongoing access to cash. In the longer-term, the regulators will work to ensure reasonable access to cash is maintained, including through use of shared services and local community initiatives, and anticipate additional powers to preserve access to cash from upcoming legislation announced in the U.K. Government’s 2020 budget.
     
    View the PSR's statement on access to cash.
     
    View the FCA's statement on access to cash.
     
    Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center.
  • European Banking Authority Provides Additional Opinion on Strong Customer Authentication Requirements for Account Servicing Payment Service Providers
    06/04/2020

    The European Banking Authority has published an Opinion on the obstacles to the provision by third-party service providers of account information and payment initiation services under the revised Payment Services Directive. PSD2 and the related Regulatory Technical Standards on strong customer authentication and common and secure communication require account servicing payment service providers to establish access interfaces through which third-party service providers can securely access a customers’ payment accounts. Where the ASPSP provides a dedicated interface (as opposed to a modified customer interface), the SCA RTS require it to ensure that there are no obstacles to the provision of services by third-party service providers. The EBA has published the Opinion in response to queries from market participants on issues arising in this area.

    Read more.
  • UK Conduct Authority Consults on Guidance on COVID-19 Measures for Mortgage Lenders and Payments Firms
    05/22/2020

    The U.K. Financial Conduct Authority has published two consultations on its draft guidance for firms on mortgages and safeguarding customers’ funds during the COVID-19 pandemic.
     
    The first consultation relates to the FCA’s proposed guidance on how mortgage lenders should treat customers coming to the end of a payment holiday or those yet to request one. The timeframe for customers who have not yet benefited from a payment holiday to apply for one will be extended to October 31, 2020. The current ban on house repossessions will also be extended to October 31, 2020.

    Read more.
  • UK Conduct Regulator Grants Regulatory Forbearance From Strong Customer Authentication for E-Commerce Transactions
    04/30/2020

    The U.K. Financial Conduct Authority has granted firms an additional six months to implement strong customer authentication for e-commerce, extending the deadline from March 14, 2021 to September 14, 2021. The forbearance has been granted in light of the exceptional circumstances arising from COVID-19, in a bid to minimize disruption to consumers and merchants.

    Read more.
  • Financial Stability Board Consults on Global Stablecoins
    04/14/2020

    The Financial Stability Board has launched a consultation on global stablecoin arrangements. The consultation is in response to the G20 mandating the FSB to analyze potential regulatory issues posed by global stablecoins and to advise on multilateral responses. Responses to the consultation should be submitted by July 15, 2020. The FSB's final report is expected to be published in October 2020.

    Read more.
  • Financial Stability Board Writes to G20 on COVID-19 Response
    04/14/2020

    The Financial Stability Board has published a letter from Randal K. Quarles, the FSB Chair, to G20 Finance Ministers and Central Bank Governors on the response to the coronavirus pandemic. The letter highlights that the financial sector needs to respond to a "twin challenge": the increased demand for credit throughout the global economy and the uncertainty around the value of assets. The letter describes how the FSB and its member jurisdictions have responded to the pandemic to support local and global market functioning, discussing in particular, the steps taken to maintaining financial stability and supporting the real economy during the COVID-19 crisis. The letter also outlines the work to promote a global financial system that supports a strong recovery, including the FSB's prioritizing of certain areas, namely non-bank financial intermediation, the orderly transition away from LIBOR, utilizing technological innovation to assist in cybersecurity and promoting efficient and resilient cross-border payments.

    View the FSB's letter.

    Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center.
  • Financial Stability Board Report on Global Enhancement of Cross-Border Payments
    04/09/2020

    The Financial Stability Board has published a report addressed to the G20 on international cross-border payment arrangements, where the sender and recipient of funds are in different jurisdictions. The report forms the first stage of the G20’s three-stage process to develop a roadmap that will enable countries to enhance their cross-border payments systems. The second stage will see the Committee on Payments and Market Infrastructures set out the building blocks of a system to improve cross-border payments and is due to be submitted to the G20 in July 2020. The third stage will involve coordination between the FSB and CPMI, together with other international organizations, to compile a roadmap for implementing the improvements. A report on the full three-stage process is expected to be delivered to the G20 in October 2020.

    Read more.
  • UK Conduct Regulator Publishes 2020/2021 Business Plan
    04/07/2020

    The U.K. Financial Conduct Authority has published its Business Plan for 2020/2021, which sets out its five key priorities for the next one to three years.

    Read more.
  • European Commission Consults on Retail Payments Strategy for the EU
    04/03/2020

    The European Commission has launched a consultation on a retail payments strategy for the EU. The Commission's final strategy will be published in Q3 2020 alongside the new digital finance strategy, on which the Commission launched a consultation on the same day. The consultation closes on June 26, 2020.

    The Commission states that the RPS will be a key to reinforcing the international role of the euro, strengthening Europe's influence and enhancing its economic autonomy. In addition, the Commission notes that safe and efficient payment systems and services will assist the EU in tackling emergencies, such as the coronavirus outbreak.

    Read more.
  • European Commission Consults on a New Digital Finance Strategy for the EU
    04/03/2020

    The European Commission has launched a consultation on a new digital finance strategy and FinTech action plan for Europe. The Commission states that although it is prioritizing fighting the coronavirus pandemic, it has decided not to delay this work because the digital finance can help to tackle issues arising as a result of the coronavirus pandemic. The Commission's final strategy, due to be published in Q3 2020, will set out the focus FinTech policy areas for the next five years. The consultation closes on June 26, 2020.

    Read more.
  • European Banking Authority Provides Clarity on the Prudential Framework in Light of COVID-19 
    03/25/2020

    The European Banking Authority has released two separate statements in response to the COVID-19 pandemic, the first covering bank prudential regulation and the second dealing with consumer protection and payment services.

    Read more.
  • International Organization of Securities Commissions Publishes Report on Global Stablecoins
    03/23/2020

    The International Organization of Securities Commissions has published a report analyzing the regulatory issues arising from the use of global stablecoins and setting out how the existing IOSCO principles would apply to a global stablecoin, depending on its structure. IOSCO states that global stablecoins, depending on how they are set up, share features with regulated securities and other regulated financial instruments and services. Using a hypothetical global stablecoin case, the report analyzes how the IOSCO Principles and Standards would apply and also considers some of the broader implications. The report also includes an analysis, jointly conducted by IOSCO and the Committee on Payment and Market Infrastructures, of the applicability of the CPMI-IOSCO Principles for Financial Market Infrastructures. The conclusion is that the PFMI will apply to global stablecoin arrangements involving the performance of systemically important payment system functions or other FMI functions.

    View IOSCO's report on global stablecoin initiatives.
  • UK Bank of England Opens Discussion on Central Bank Digital Currency Options
    03/12/2020

    The Bank of England has published a Discussion Paper on central bank digital currency opportunities, challenges and design. The BoE is one of several banks exploring introducing a CBDC. The Discussion Paper describes a platform model of CBDC that demonstrates the issues raised by the concept of a CBDC, highlighting both the risks and opportunities. The BoE stresses that the model does not represent any decision by the BoE on the design of a CBDC and is merely intended to aid the overall discussion. Indeed, the BoE emphasizes that no decision has been made on whether to introduce a CBDC and that it would need to ensure that the benefits outweigh any risks. If a CBDC were to be introduced in the U.K. it would be denominated in pounds sterling and would exist alongside cash and commercial bank deposits.

    Read more.
  • Guidance Published on Digital Identification Technologies for Anti-Money Laundering Purposes
    03/06/2020

    The Financial Action Task Force has published Guidance on how digital identification technologies can be used to conduct some aspects of customer due diligence for anti-money laundering purposes. The FATF presents a risk-based approach to the use of digital ID software, relying on a set of open source, consensus-driven assurance frameworks and technical standards for digital ID systems. In addition, the FATF sets out a series of recommendations for relevant authorities, regulated entities (meaning financial institutions, virtual asset service providers and designated non-financial businesses and professions) and digital ID services providers. The Guidance is non-binding, however, it clarifies the FATF's standards.

    View the FATF's Guidance on digital ID.
  • UK Payment Systems Regulator Publishes Policy Statement on Confirmation of Payee Requirements
    02/14/2020

    The U.K. Payment Systems Regulator has published a policy statement setting out its final decision on varying Specific Direction 10, which requires payment service providers to implement the Confirmation of Payee system by March 31, 2020. Confirmation of Payee is a system which 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.
    Read more.
  • UK Payment Systems Regulator Consults on Competition and Innovation Issues in the New Payments Architecture
    01/28/2020

    The U.K. Payment Systems Regulator has published a Call for Input on competition and innovation in the U.K.'s New Payments Architecture. Feedback was originally requested by March 24, 2020, but in light of COVID-19 that deadline has been extended to May 1, 2020. The PSR confirms that it will consult further on this issue, including on a draft policy statement. All of the feedback will assist the PSR to develop the NPA regulatory policy, the final version of which will be published before the end of 2020. The NPA will reorganize the clearing and settlement of most of the U.K.'s domestic interbank payments, including payments that currently use the BACS and Faster Payments systems. The consultation paper sets out certain potential harms to competition and innovation and possible mitigating measures to address these.

    View the call for input.
  • 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.
  • 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.
  • 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.
  • 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.

    Read more.
  • Committee on Payments and Market Infrastructures Publishes Report on Wholesale Digital Tokens
    12/12/2019

    The Committee on Payments and Market Infrastructures has published a report on wholesale digital tokens. The report focuses on how digital tokens might be used to effect settlement in wholesale transactions, replacing existing systems where such transactions are settled by updating balances in account records on a centralized register. The CPMI confirms that any wholesale digital token arrangement would need to comply with the applicable regulatory requirements, including, if the arrangement is systemically important, the Principles for Financial Market Infrastructure.

    Read more.
  • UK Conduct Regulator Publishes Consultation on Proposed Miscellaneous Changes to Rules
    12/06/2019

    The U.K. Financial Conduct Authority has published a consultation on its proposed changes to various aspects of the FCA Handbook.

    Read more.
  • EU Statement on Stablecoins
    12/05/2019

    The Council of the European Union and the European Commission have published a joint statement on stablecoins. The statement reiterates many of the messages of the G7 working group paper on the impact of stablecoins. The EU statement confirms that no global stablecoin arrangement should begin to operate in the EU until the legal, regulatory and supervisory issues can be identified and dealt with appropriately. In the statement, the two EU bodies allude to the lack of information as a key impediment to global stablecoin arrangements being able to operate in the EU, in particular, because without it the authorities are unable to consider the impact on monetary policies or assess how to address other risks presented by this type of cryptoasset.

    View the EU statement on stablecoins.

    View details of the G7 working group paper on stablecoins.
  • UK Regulators Launch Consultation on Operational Resilience in Financial Services
    12/05/2019

    The Bank of England, U.K. Prudential Regulation Authority and U.K. Financial Conduct Authority have published a shared policy summary and consultation papers on strengthening operational resilience in the financial services sector. The consultation impacts banks, building societies, PRA-designated investment firms, firms subject to the Solvency II Directive, recognized investment exchanges, CCPs, central securities depositories, payment system operators, FCA enhanced scope SM&CR firms and entities authorized and registered under the Payment Services Regulations 2017 and Electronic Money Regulations 2011. Responses to the consultation should be submitted by April 3, 2020.

    Read more.
  • European Banking Authority Publishes Guidelines on Technology and Security Risk Management
    11/28/2019

    The European Banking Authority has published its final guidelines on the management of information and communication technology and security risks by financial institutions in the EU. The Guidelines set out how financial institutions should comply with relevant provisions on the governance and risk management of ICT and security risks under the Fourth Capital Requirements Directive and the Second Payment Services Directive. 

    Read more.
  • UK Legal Statement on CryptoAssets and Smart Contracts
    11/18/2019

    The UK Jurisdiction Taskforce has published a legal statement on cryptoassets and smart contracts under English private law. UKJT is part of the LawTech Delivery Panel, an industry-led group established in 2018, with the aim of identifying barriers and opportunities for growth. The legal statement provides the UKJT's view of the principles applicable under English and Welsh private law for determining when a cryptoasset will be considered property and when an enforceable contract is concluded through a smart contract. The intention of the statement is to help improve confidence among market participants and investors due to the perception of legal uncertainty on the legal status of cryptoassets and smart contracts.

    Read more.
  • UK Conduct Regulator Further Extends Deadline for E-Money and Payment Services Temporary Permissions Notifications
    10/30/2019

    The U.K. Financial Conduct Authority has published two amending Directions under the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 extending the deadlines by which e-money and payment services firms should notify the FCA of their intention to rely on the temporary permissions regime following the U.K.’s exit from the EU. These firms should now make notifications by January 30, 2020. The extended deadline falls immediately before the revised Brexit deadline of January 31, 2020.

    View the FCA's amended Direction on notifications for the e-money services temporary permissions regime.

    View the FCA's amended Direction on notifications for the payment services temporary permissions regime
  • European Banking Authority Urges EU Legislative Update for Cross-Border Banking and Payment Services in the Digital Era
    10/29/2019

    The European Banking Authority has published a report identifying potential barriers to customer choice and the cross-border provision of banking and payment services in the EU, together with proposals for how to overcome these issues. Building on the EBA's FinTech Roadmap and the European Commissioner's Consumer Financial Services Action Plan, the report sets out the areas where the institutions, including FinTech firms, may face challenges when seeking to provide intra-EU cross-border services, focusing on authorizations and licensing, consumer protection and conduct of business requirements and anti-money laundering and countering the financing of terrorism. The EBA makes recommendations for where changes to EU primary legislation or further guidelines could address the issues to enhance the EU's single market.

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  • UK Regulator Publishes Final Technical Standards on Strong Customer Authentication in the Event of a No-Deal Brexit
    10/25/2019

    The U.K. Financial Conduct Authority has published a Policy Statement, final Technical Standards and changes to the Handbook rules on strong customer authentication and common and secure open standards of communication to be applicable when the U.K. leaves the EU. The FCA consulted on the proposed SCA RTS in early 2019 when the U.K. was due to leave the EU on March 29, 2019, and before the EU SCA Regulatory Technical Standards application date. Since then, Brexit has been extended and the EU SCA RTS has applied directly across the EU since September 14, 2019. As a result, the EU SCA RTS would be onshored into U.K. law under the Withdrawal Act. However, in preparation for a no-deal Brexit, the U.K. Payment Services Regulations would require firms to apply the U.K. SCA RTS. As a result, the EU SCA RTS would be revoked and the FCA's SCA RTS will apply in the U.K. in the event of a no-deal Brexit.

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  • Committee on Payments and Market Infrastructures Publishes Toolkit for Reducing Wholesale Payments Fraud
    10/22/2019

    The Committee on Payments and Market Infrastructures has prepared a “toolkit” to assist central banks to reduce the risk of wholesale payments fraud related to endpoint security. The Financial Stability Institute at the Bank for International Settlements has also announced that it will make tutorials on wholesale payments security freely available to central banks on request.

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  • G7 Working Group Reports on the Impact of Global Stablecoins
    10/18/2019

    The G7 working group on stablecoins has published a report investigating the impact of global stablecoins. The working group is comprised of senior officials from the G7 central banks, the International Monetary Fund, the Bank for International Settlements and the Financial Stability Board, and is chaired by Benoît Cœuré (Chair of the Committee on Payments and Market Infrastructures). 

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  • Financial Stability Board to Assess Potential Risks of Stablecoins
    10/18/2019

    The Financial Stability Board has published a report on regulatory issues arising with respect to so-called stablecoins. The FSB defines a stablecoin as "a crypto-asset designed to maintain a stable value relative to another asset (typically a unit of currency or commodity) or a basket of assets" which may be "collateralised by fiat currency or commodities, or supported by algorithms".

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