Your weekly summary of key regulatory updates in an objective bite-size format, drawing on official news and press releases from 400+ financial services regulators, central banks as well as global and regional standard setters,
At a glance - Highlights by topic
Visit Regxelerator’s new end-to-end automated and AI-powered regulatory news platform for ongoing updates. U.S. FDIC to assume all deposits and loans of Silicon Valley Bridge Bank, National Association U.S. CFPB survey aims to help consumers easily compare credit card interest rates and features PSR introduces new reporting requirement to hold payment firms accountable for APP scams performance Southeast Asian Central Banks connect through BIS Innovation Hub's Nexus Project for enhanced cross-border payments CBUAE launches Digital Dirham as part of financial infrastructure transformation programme Eurosystem launches new T2 wholesale payment system WFE introduces global framework to combat greenwashing and spur sustainable capital flow IASB initiates project to consider climate-related risks in financial statements Arab Monetary Fund releases study on global efforts to combat climate change impacts ECB publishes first climate-related financial disclosures 38th Chairs' Meeting of ASEAN Capital Markets Forum convenes to promote transition to Paris Agreement Goals GCC Central Bank Governors meet in Muscat to discuss banking supervision, fintech, and more ESMA Fines S&P Global Ratings Europe Limited for breach of CRA Regulation EIOPA hosts successful “Eastern Cooperation Conference” Canadian Securities Administrators publish advance notice of adoption of rules ahead of SEDAR+ launch U.S. Federal Reserve Banks agree to common policy for public info requests by end of year
Prudential & financial stability
U.S. FDIC to assume all deposits and loans of Silicon Valley Bridge Bank, National Association
The U.S. Federal Deposit Insurance has announced that it has entered into a purchase and assumption agreement with First–Citizens Bank & Trust Company to take over all deposits and loans of Silicon Valley Bridge Bank, National Association. The 17 branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023. Depositors of Silicon Valley Bridge Bank, National Association will become depositors of First–Citizens Bank & Trust Company and deposits will remain insured up to the insurance limit. The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion.
FINMA reiterates write-down of Credit Suisse AT1 Instruments
Following further inquiries, FINMA has reiterated that it has instructed Credit Suisse to completely write down its AT1 instruments and to inform the concerned bondholders without delay. The right for write-down is anchored in the contract underlying the bond agreement. Specifically, the AT1 instruments issued by Credit Suisse contractually provide that they will be completely written down in a so-called “Viability Event”, such as when extraordinary government support is granted. “As Credit Suisse was granted extraordinary liquidity assistance loans secured by a federal default guarantee on 19 March 2023, these contractual conditions were met for the AT1 instruments issued by the bank”, FINMA notes in its statement.
MAS and HKMA clarify creditor hierarchy in resolution scenario
In the wake of the Credit Suisse takeover by UBS, both the Monetary Authority of Singapore (MAS) and the (HKMA) have issued statements to clarify the treatment of Additional Tier 1 (AT1) and Tier 2 capital instruments. The statements reiterate that shareholders are the first to absorb losses in the event of a resolution, before holders of AT1 and Tier capital instruments. MAS further highlighted that it will also provide a resolution fund for creditors to claim any difference in the amount received compared to a liquidation, highlighting that “the creditor compensation framework will also apply in the exceptional situation where MAS departs from the creditor hierarchy in order to contain the potential systemic impact of the FI’s failure or to maximise the value of the financial institution for the benefit of all creditors as a whole”.
Conduct & consumer protection
U.S. CFPB survey aims to help consumers easily compare credit card interest rates and features
The U.S. Consumer Financial Protection Bureau (CFPB) has launched an improved survey of credit card issuers to help consumers compare interest rates and features when shopping for a new card. According to the CFPB, Americans currently pay $120 billion in credit card interest and fees annually. The CFPB’s semiannual terms of credit card plans survey serves as a neutral data source to aid consumer in identifying the best interest rates and products. Under the updated survey, the CFPB will inter alia increase the number of issuers included and the amount of information collected. The enhanced information transparency will contribute to greater price competition in the credit card market by allowing people to comparison shop for the best prices and products while also strengthening visibility of smaller issuers, who often have lower rates.
Payments & currency
PSR introduces new reporting requirement to hold payment firms accountable for APP scams performance
The Payment Systems Regulator (PSR) is introducing a new reporting requirement to provide data on APP scam performance for the first time. This will hold payment firms across the industry accountable for their performance and give customers more power when choosing who to bank with. The PSR will collect data from 14 of the largest UK payment service provider (PSP) groups and publish the results on their website in October. This data will provide insight into the proportion of victims of APP scams who do not get reimbursed, as well as the rates of APP scams happening at sending and receiving payment firms. The PSR is also introducing financial and reputational incentive measures to tackle APP scams and will direct firms to reimburse customers once the Financial Services and Markets Bill is passed.
Southeast Asian Central Banks connect through BIS Innovation Hub's Nexus Project for enhanced cross-border payments
The Bank for International Settlement’s Innovation Hub Singapore Centre has announced the successful proof-of-concept under its Project Nexus to improve cross-border payments. The prototype successfully connected the domestic instant payment systems (ISPs) of the Eurosystem, Malaysia, and Singapore payment system, enabling payments to be sent across the three systems using only mobile phone numbers or the recipients’ company registration numbers. As part of next steps of the project, the central banks of Indonesia, Malaysia, the Philippines, Singapore and Thailand will work towards connecting their countries' IPS and facilitate cross-border transactions across a combined population of about 500 million people. Furthermore, the BIS plans to establish a Global Advisory Panel to advise on the project’s development as it considers scaling the solution beyond the Southeast Asian region. A webinar is scheduled for 5 April to provide more details on the project.
CBUAE launches Digital Dirham as part of financial infrastructure transformation programme
Building on its past CBDC efforts, the Central Bank of UAE (CBUAE) has launched its new Central Bank Digital Currency (CBDC) Strategy, The Digital Dirham. The Strategy represents one of the nine initiatives under the CBUAE’s recently announced Financial Infrastructure Transformation Programme. Phase 1 of the strategy is planned to be completed over the next 12 to 15 months and encompasses three major pillars: (1) the soft launch of mBridge to facilitate realvalue cross-border CBDC transactions for international trade settlement, (2) proof-ofconcept work for bilateral CBDC bridges with India, and (3) proof-of-concept work for domestic CBDC issuance covering wholesale and retail usage. In support of the implementation, G42 Cloud and R3 have been engaged as the infrastructure and technology providers respectively.
Eurosystem launches new T2 wholesale payment system
After over 5 years of preparatory work, the Eurosystem launched its new T2 wholesale payment system on March 20. T2 replaces TARGET2 and consists of a real-time gross settlement (RTGS) system and a central liquidity management tool. The launch of the new system is part of the Eurosystem's efforts to modernize financial markets. Among other things, it will improve cost efficiency, offering enhanced cyber resilience and the ability to steer, manage, and monitor liquidity. Additionally, the system contributes to greater harmonization through the move to the ISO 20022 message standard, as well as a set of common components that are shared across TARGET services, bringing further cost savings for participants. The software and the environment for the new system were delivered by the central banks of Italy, Spain, France and Germany.
WFE introduces global framework to combat greenwashing and spur sustainable capital flow
The World Federation of Exchanges (WFE) has announced the WFE Green Equity Principles, a global framework for designating stocks and shares as green, to counter greenwashing and promote capital flow towards more sustainable economies. The framework consists of criteria and a classification based on five pillars: revenues/investments, use of a taxonomy, governance, assessment, and disclosure. It is designed to enable exchanges to promote green activities, allow issuers to raise their profiles and increase visibility, and help investors make informed decisions. The WFE will be opening the Principles and accompanying guidance note to public consultation.
IASB initiates project to consider climate-related risks in financial statements
The International Accounting Standards Board (IASB) has announced its intention to explore the disclosure of climate-related risks in the context of financial statements. The project comes in response to stakeholder feedback, following initial publication of a set of educational materials to help companies consider climate-related risks when preparing their financial statements and will involve an assessment of the additional actions that companies may take to improve their information on climate-related risks. As part of its efforts, the IASB will consider the ongoing work of the International Sustainability Standards Board (ISSB) to ensure alignment with Sustainability Disclosure Standards that are currently under development.
Arab Monetary Fund releases study on global efforts to combat climate change impacts
The Arab Monetary Fund has released a new study on “Global efforts to fight the consequences of climate change: the role of Regional Financing Arrangements”. The study, which was developed in collaboration with multiple partner organizations, provides an overview of steps taken by Regional Financing Arrangements (RFAs) to incorporate climate considerations into their activities, including economic monitoring, lending, capacity building, and internal policies and operations. It specifically aims to deepen the RFAs’ understanding of how their regional peers are approaching climate change and to stimulate collective reflections on how best to support members’ efforts to foster a more sustainable and resilient future.
ECB publishes first climate-related financial disclosures
The European Central Bank (ECB) has published its first climate-related financial disclosures. The disclosures, which provide information on its portfolios’ carbon footprint, exposure to climate risks, governance, strategy and risk management come in the form of two reports, encompassing the Eurosystem’s corporate security holdings under the corporate sector purchase programme (CSSP) and the pandemic emergency purchase programme (PEPP), as well as the ECB’s euro-denominated non-monetary policy portfolios (NMPPs), including its own funds portfolio and its staff pension funds. The disclosures show that the corporate bonds held under the CSPP and PEPP are on a decarbonisation path, and that the ECB has more than halved emissions from corporate and equity investments in its staff pension fund since 2019. Going forward, the ECB will expand the scope of the disclosures and set interim decarbonisation targets for its own funds portfolio and staff pension fund.
Other transversal themes
38th Chairs' Meeting of ASEAN Capital Markets Forum convenes to promote transition to paris agreement goals
The ASEAN Capital Markets Forum (ACMF) convened its 38th Chairs' Meeting today with the purpose of promoting transition towards the Paris Agreement Goals in the region by developing broad principles-based transition guidelines. As part of its efforts to promote corporate sustainability disclosure and strengthen awareness of the forthcoming International Sustainability Standards Board standards, the Forum agreed to strengthen the collaboration with the ISSB by having regular reengagement sessions as well as joint events/conferences. The meeting also discussed the Voluntary Carbon Market (VCM) Study Phase 2 and the Sustainable Finance Knowledge Hub, both of which are aimed at assisting in the development and communication of transition plans. Furthermore, the Forum approved the approach to developing the ASEAN Green Lane to facilitate cross-border offering of ASEAN sustainable and responsible funds under the existing ASEAN CIS Framework with the timeline for endorsement expected to be in September 2023.
GCC Central Bank Governors meet in Muscat to discuss banking supervision, fintech, and more
The GCC Committee of Central Bank Governors held its 80th meeting in Muscat, Sultanate of Oman on Tuesday 21st March 2023. The meeting was chaired by His Highness Sayyid Taimur bin Asa'ad bin Tariq Al Said and included participation from governors of GCC central banks and the Assistant Secretary for Economic and Development Affairs of General Secretariat of the Gulf Cooperation Council. Topics discussed included supervision and surveillance of the banking sector, payment systems, FinTech, AML/CFT, cybersecurity, linking GCC payment systems, joint dialogue between GCC central banks and European central banks, and joint dialogue with Chinese authorities.
ESMA Fines S&P Global Ratings Europe Limited for breach of CRA Regulation
The European Securities and Markets Authority (ESMA) has fined S&P Global Ratings Europe Limited (S&P) a total of EUR 1,110,000 for breaches of the Credit Rating Agencies Regulation. The breaches include deficiencies in S&P's internal control mechanisms which failed to ensure compliance with timely disclosure of credit ratings, failure to disclose decisions to discontinue credit ratings, and failure to submit up-to-date rating information to ESMA. All breaches were found to have resulted from negligence on the part of S&P.
EIOPA hosts successful 'Eastern Cooperation Conference'
EIOPA hosted its 'Eastern Cooperation Conference' today, bringing together insurance supervisors from both EEA and non-EEA jurisdictions. The conference focused on exchanging views on supervisory experiences and practices, particularly related to the implementation of risk-based supervisory frameworks like Solvency II. Representatives from 10 non-EEA jurisdictions, 10 EU national competent authorities, the International Monetary Fund, the World Bank, the Access to Insurance Initiative, the European Commission, and the Eastern European Risk and Insurance Association Institutions were in attendance, as well as academics from two universities. EIOPA chair Petra Hielkema underlined the importance of working together to develop and implement effective regulatory frameworks that can support sustainable and inclusive growth. The conference concluded with a roundtable discussion on cooperation, and EIOPA is opening its training program to Ukrainian supervisors as part of a longer-term relationship.
Canadian Securities Administrators publish advance notice of adoption of rules ahead of SEDAR+ launch
In preparation for the launch of the new national filing and information system SEDAR+ in June this year, the Canadian Securities Administrators have published advance notices of adoption that propose a new system fee structure and filing requirements. These involve the repeal and replacement of the existing Multilateral Instrument 13-102 System Fees for SEDAR and NRD in favor of the implementation of a flat-fee model under SEDAR+ as well as the adoption of the new National Instrument 12-103 (SEDAR+ to require filers to electronically transmit all documents to securities regulators through the new system, subject to certain exceptions. The new instruments will come into effect on June 9, 2023.
U.S. Federal Reserve Banks agree to common policy for public info requests by end of year
In an effort to further strengthen their commitment to transparency and accountability, the 12 U.S. Federal Reserve Banks via a joint statement agreed to implement a common policy for public requests for information. The new policy which will build on the Banks’ existing procedures for providing information to the public is planned to be finalized and published by the end of the year.
Andrew J. Beal has been appointed as the Acting Chief Executive Officer of the National Association of Insurance Commissioners (NAIC). He currently serves as the Chief Operating Officer and Chief Legal Officer of the NAIC and joined the organization in 1999.
The European Single Resolution Board has entered into cooperation arrangements with the Australian Prudential Regulation Authority, the Central Bank of the Argentine Republic and the Reserve Bank of New Zealand with a view to further strengthening the exchange of information and cooperation on bank resolution planning, most notably for banks with cross-border cooperation.
The UAE Securities and Commodities Authority and the UAE Abu Dhabi Fund have entered into a partnership to create a general framework for initial public offerings in Abu Dhabi.
Egyptian Financial Regulatory Authority and London Institute of Banking and Finance sign MoU to advance sustainable finance through the exchange of technical expertise and the development of local capabilities.
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