Gallery
Share
Explore

Global Regulator & Central Bank News Roundup (Vol. 25/2023)

June 26 - July 2 2023
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


info
Visit Regxelerator’s new end-to-end automated and AI-powered regulatory news platform
Regxplora
⁠
for ongoing updates.

⁠
Prudential & financial stability
⁠
⁠
ESRB concludes financial stability risks in EU remain severe 50th regular meeting
UK PRA launches consultation on key aspects of new Solvency UK framework
U.S. Federal Reserve Board stress test demonstrates large banks are well-positioned to weather severe recession and continue lending
⁠
AML & CFT
⁠
⁠
FATF releases targeted update on its on the implementation of its standards on virtual assets and virtual asset service providers
FATF seeks stakeholder feedback on the proposed revisions to its recommendation 8 and the associated interpretive note
⁠
Cyber & operational resilience
⁠
⁠
FSC Mauritius invites public to provide feedback on draft guidelines on cloud computing services
OCC releases cybersecurity supervision work program to enhance assessment of banks’ cybersecurity preparedness
⁠
Conduct & consumer protection
⁠
⁠
EIOPA agrees to coordinate joint mystery shopping exercise across 8 member states to assess customer experience
⁠
Fintech & ecosystem innovation
⁠
⁠
MAS-led consortium releases Veritas Toolkit 2.0 to enable responsible use of AI in financial industry
Bank of Italy releases new crypto-paper titled “Making it through the (crypto) winter: facts, figures and policy issues”
⁠
Payments & currency
⁠
⁠
RBNZ releases summary of submissions on private money innovations
European Commission proposes legislation to facilitate possible introduction of a digital euro
Digital Dollar Project releases working paper on secure adoption of the Digital Dollar
⁠
ESG
⁠
⁠
ISSB issues first set of IFRS sustainability disclosure standards
MAS proposes industry code of conduct to enhance transparency in ESG ratings and data products
Bank of Thailand and Thai SEC complete first phase of Thailand’s taxonomy development
MAS launches final consultation on criteria for financing early phase-out of coal-fired power plants
⁠
Other transversal themes
⁠
⁠
Thailand launches digital platform for the issuance of private debt securities
Canadian Securities Regulators release framework for commodity benchmarks
Ontario Securities Commission publishes report to help public accounting firms develop robust internal ethical policies and procedures
CFTC establishes cybersecurity and environmental fraud task forces within its Enforcement Division

⁠

Prudential & financial stability


ESRB concludes financial stability risks in EU remain severe 50th regular meeting
The General Board of the European Systemic Risk Board (ESRB) has held its 50th regular meeting. The Board acknowledged that financial stability risks in the EU remain severe. It noted that the termination of the protracted low-interest-rate phase has transformed the global risk landscape, and effects of a substantial interest rate hike are gradually unfolding. The recent banking sector instability in the US and Switzerland has raised uncertainties and modified market views on banks, including those related to exposures to long-term fixed-income securities, deposit funding stability, and the likelihood of swift outflows of uninsured deposits. However, the EU banking sector's robust capital and liquidity positions and the favorable profitability due to monetary policy normalization equip it well to confront the emerging risk environment. The ESRB also highlighted that the real estate cycle in various EU countries has reached, or even crossed, its turning point. Indicators of a downturn in the residential real estate markets are suggested by decreasing transactions and credit market markers, while the commercial real estate market shows a continuing decline in investment, influenced by worsening business sentiment, a negative profitability forecast, increasing financing costs, and stricter credit standards. Beyond this, the Board also discussed the risks and vulnerabilities related to investment funds investing in assets which are either inherently illiquid or might become illiquid in times of stress as well as the findings of a new report on corporate credit and leverage. On the heels of the meeting, the ESRB furthermore released the latest edition of its systemic risk dashboard.
⁠
Link
⁠
⁠
⁠
UK PRA launches consultation on key aspects of new Solvency UK framework
The UK PRA has launched the consultation into proposed reforms of Solvency II with the aim of creating a new UK regulatory regime for insurance firms, dubbed as Solvency UK The proposals include inter alia streamlining of reporting requirements, simplifying and improving the assessment of internal models, and easing entry of new firms and simplifying the regulation of international insurers operating through branches and are designed to reduce bureaucracy, facilitate competition, and support UK economic growth and competitiveness without lowering prudential standards or weakening policyholder protection. The consultation period runs until 1 September 2023 for proposals in Chapters 2 to 10 and until 31 July 2023 for proposals in Chapter 11.
⁠
Link
⁠
⁠
⁠
U.S. Federal Reserve Board stress test demonstrates large banks are well-positioned to weather severe recession and continue lending
The U.S. Federal Reserve Board's (FRB) annual bank stress test has demonstrated that large banks are well positioned to weather a severe recession and continue to lend to households and businesses. This year's test included a severe global recession with a 40% decline in commercial real estate prices, a substantial increase in office vacancies, a 38% decline in house prices as well as 6.4% rise in the unemployment rate. All 23 banks tested remained above their minimum capital requirements during the hypothetical recession, despite total projected losses of USD 541 billion. Of those losses, over USD 100 billion stem from commercial real estate and residential mortgages losses, and USD 120 billion from credit card losses. The test also included for the first time an exploratory market shock on the trading books of the largest banks, testing them against greater inflationary pressures and rising interest rates. The insights showed that here too the largest banks' trading books were resilient to the rising rate environment tested.
⁠
Link
⁠
⁠
⁠

AML & CFT


FATF releases targeted update on its on the implementation of its standards on virtual assets and virtual asset service providers
The Financial Action Task Force (FATF) has released an update on the implementation of its standards for virtual assets and virtual asset service providers as encapsulated in Recommendation 15 and the associated Interpretative Note (R.15/INR.15). FATF findings suggest that jurisdictions struggle with essential requirements such as risk assessment, legislating to regulate VASPs, and conducting supervisory inspection. Based on 98 FATF evaluations, 75% of jurisdictions are either partially or non-compliant with FATF requirements. Alarmingly, over half of the 151 jurisdictions surveyed in 2023 have not made any progress on implementing the Travel Rule, a crucial AML/CFT measure. Against this backdrop, the report emphasizes the urgent need for accelerated implementation and enforcement of R.15/INR.15 due to the increasing risks associated with VAs and VASPs. It lauds the private sector's collaborative efforts to enhance industry compliance with R.15/INR.15, including the Travel Rule. It also points out that while DeFi, unhosted wallets, and P2P transactions represent a small share, they are vulnerable to misuse. To address these findings, FATF will continue to provide assistance to low-capacity jurisdictions, track progress, and facilitate the sharing of experiences, challenges, and findings. It will also monitor market trends and conduct a review of progress and remaining implementation challenges by June 2024.
⁠
Link
⁠
⁠
⁠
FATF seeks stakeholder feedback on the proposed revisions to its recommendation 8 and the associated interpretive note
The Financial Action Task Force (FATF) is consulting on amendments to its Recommendation 8 and the Interpretive Note (R.8/INR.8), which it established to protect Non-Profit Organizations (NPOs) from terrorist financing abuse. The proposed amendments are intended to address issues of over-application of preventive measures on NPOs. In particular, the FATF is seeking feedback on Paragraph 7(b)(iii) of INR.8, which lists measures countries can apply to NPOs based on their terrorist financing risk exposure. Some jurisdictions might perceive these examples as mandatory. To remedy this, four options have been suggested: transferring these examples to the Best Practices papers, relocating them to a footnote of 7(b)(i), summarizing them in a new footnote, or leaving the current wording unchanged. Stakeholders can submit responses, including any drafting proposals, to the FATF by August 18, 2023. The FATF will consider all submissions in revising the draft before proposing it for adoption at the October 2023 Plenary.
⁠
Link
⁠
⁠
⁠

Cyber & operational resilience


FSC Mauritius invites public to provide feedback on draft guidelines on cloud computing services
The Financial Services Commission (FSC) Mauritius has issued the draft guidelines on cloud computing services for public consultation. The primary objectives of the draft guidelines are to provide best practices to be adopted by licensees of the FSC when adopting cloud computing services. Among other things, the guidelines set out provisions in relation licensees’ cloud strategy and policy, cloud risk management framework, cloud materiality assessments, due diligence on cloud providers and the cloud security and data management framework. Stakeholders are invited to submit feedback to the proposed guidelines until 21 July 2023.
⁠
Link
⁠
⁠
⁠
OCC releases cybersecurity supervision work program to enhance assessment of banks’ cybersecurity preparedness
The U.S. Office of the Comptroller of the Currency (OCC) has released the Cybersecurity Supervision Work Program (CSW). The Cybersecurity Supervision Work Program (CSW) provides high-level examination objectives and procedures to be used by examiners to assess the cybersecurity preparedness of banks. Designed with the objective to more effectively address evolving risks and support risk-based bank information technology examinations, the CSW aligns with the five National Institute of Standards and Technology Cybersecurity Framework functions (NIST-CSF) - Identify, Protect, Detect, Respond, and Recover - and the related categories and subcategories with exception of those that are addressed as part of other examination programs or subcategories that do not apply to the OCC bank supervision process. It does not establish new regulatory expectations.
⁠
Link
⁠
⁠
⁠

Conduct & consumer protection


EIOPA agrees to coordinate joint mystery shopping exercise across 8 member states to assess customer experience:
EIOPA has agreed to coordinate a joint mystery shopping exercise in 8 Member States to assess the experience of customers in practice. The exercise will use trained mystery shoppers acting as potential customers to gather detailed information on how providers or distributors sell products and provide services to consumers. The results of the exercise will be available in the first half of 2024.
⁠
Link
⁠
⁠
⁠

Fintech & ecosystem innovation


MAS-led consortium releases Veritas Toolkit 2.0 to enable responsible use of AI in financial industry
The Monetary Authority of Singapore (MAS) has released Veritas Toolkit version 2.0, an open-source toolkit to enable the responsible use of Artificial Intelligence (AI) in the financial industry. Developed by a consortium of 31 industry players led by MAS, the toolkit provides guidance to firms offering financial products and services on the responsible use of AI and data analytics, and includes assessment methodologies for Fairness, Ethics, Accountability, and Transparency. The consortium has also published a white paper detailing the key lessons learnt by seven firms which piloted the integration of the Veritas methodology with their internal governance framework. In the coming years, the consortium will focus on training in the area of responsible AI and facilitate more firms’ adoption of the Veritas Methodologies and Toolkit.
⁠
Link
⁠
⁠
⁠
Other highlights
The Bank of Italy has published a new issue of the series 'Markets, infrastructures, payment systems' entitled 'Making it through the (crypto) winter: facts, figures and policy issues'. The paper examines the challenges and regulatory developments of the crypto-asset market in 2022, and highlights key remaining open issues.
⁠
Link
⁠
⁠
⁠

Payments & currency


RBNZ releases summary of submissions on private money innovations
The Reserve Bank of New Zealand (RBNZ) has released a summary of submissions in response to its issues paper on “The Future of Money — Private Innovation: Te Moni Anamata — Te Auahatanga”, which addressed developments in the cryptoasset sector including stablecoins and the RBNZ’s potential response. The summary synthesizes the key feedback received via 50 stakeholder submissions. Ian Woolford, Director of Money and Cash, highlighted that the submissions reinforce the view that there are both risks and opportunities from stablecoins and other private money innovations, but also significant uncertainties. Among other things, stakeholders stressed the need for a whole-of-public sector response for the potential regulation of the cryptoasset sector and indicated their support for a principles-based approach that appropriately balances different policy objectives and that is consistent with the international direction for cryptoasset regulation. Stakeholders also agreed on the RBNZ’s proposed stance to introduce a dedicated monitoring regime with particular emphasis on the evolution of stablecoins. Against this backdrop, the RBNZ will move forward with a three-phased approach over the coming 18+ months to establish and roll out the new monitoring framework and on the basis of the insights gained, determine whether a re-evaluation of its regulatory stance will be necessary.
⁠
Link
⁠
⁠
⁠
European Commission proposes legislation to facilitate possible introduction of a digital euro
The European Commission has proposed legislation to facilitate the possible introduction of a digital euro. The legislative package consists of two mutually supportive sets of measures: (1) a legislative proposal on the legal tender of euro cash, and (2) a legislative proposal establishing the legal framework for a possible digital euro as a complement to euro cash. The first proposal intends to specify in legislation the details of what constitutes legal tender of euro cash in terms of acceptance and access, thereby creating clearer expectations towards Member States regarding the acceptance of cash payments and sufficient and effective access to cash and thus safeguarding its role. The second proposal stipulates the legal framework and key tenets for the potential adoption of a digital euro. Consistent with previous recommendations by the European Central Bank, under the proposal the digital euro would be a direct liability of the European Central Bank or of national central banks towards digital euro users and would have legal tender status. Among other things, the regulation specifies details for the digital euro’s distribution both within and outside of the euro area, specifies required technical features as well as sets out the privacy and data protection and the AML framework. The proposal was welcomed by the European Central Bank (ECB). The ECB is set to make a decision in autumn whether to move to the next phase of the digital euro project.
⁠
Link
⁠
⁠
⁠
Digital Dollar Project releases working paper on secure adoption of the Digital Dollar
The Digital Dollar Project (DDP) has released the first in a series of working papers, titled “Secure Adoption of a Digital Dollar – Operational and Compliance Risks for the U.S. Banking Sector”. The report outlines the potential impacts of a U.S. CBDC on the private sector, specifically federal and state-chartered banks, and provides policy recommendations for consideration by the public sector. In particular, the paper identifies twelve risk-related themes and suggests ways to mitigate risks and options for policymakers to consider. The goal of the paper is to invite broad public discussion on these complex issues and to provide policymakers and private sector organizations with a clearer picture of what implementing a Digital Dollar in the U.S. would look like.
⁠
Link
⁠
⁠
⁠

ESG


ISSB issues first set of IFRS sustainability disclosure standards
The International Sustainability Standards Board (ISSB) has issued its first standards, IFRS S1 and IFRS S2, to create a common language for disclosing climate-related risks and opportunities in capital markets. The standards are intended to provide a global baseline of sustainability-related disclosures for the capital markets and are designed to ensure companies provide investors with decision-useful, material information. The standards are are built on and consolidate the TCFD recommendations, SASB Standards, CDSB Framework, Integrated Reporting Framework and World Economic Forum metrics to streamline sustainability disclosures. Furthermore, the standards are also designed to be interoperable with the Global Reporting Initiative (GRI) standards.
⁠
Link
⁠
⁠
⁠
MAS proposes industry code of conduct to enhance transparency in ESG ratings and data products
The Monetary Authority of Singapore (MAS) has proposed a new industry code of conduct addressed towards providers of Environmental, Social, and Governance (ESG) ratings and data products. The code of conduct, which was co-created with industry representatives, seeks to establish minimum standards of transparency in methodologies and data sources, governance, and management of conflicts of interest. It aligns closely with the IOSCO’s Call for Action issued in late 2022 and is intended to help address some of the observed issues associated with ESG rating and data product providers such as limited transparency of providers’ methodologies and data sources and shortcomings in relation to providers’ governance, controls and management of conflicts of interest. MAS will take further decisions regarding the potential introduction of a regulatory framework following further monitoring of the implementation of the new code as well as subject to further global developments in this area. Feedback to the consultation can be provided until 22 August.
⁠
Link
⁠
⁠
⁠
Other highlights
The Bank of Thailand (BOT) and the Securities and Exchange Commission (SEC) have completed the first phase of the development of Thailand’s taxonomy. The first phase focused on grouping economic activities in the energy and transport sectors given their high emission of greenhouse gases. On July 5, the organizations will hold a joint seminar on the new taxonomy.
⁠
Link
⁠
⁠
The Monetary Authority of Singapore (MAS) has launched a public consultation on the detailed thresholds and criteria for financing the early phase-out of coal-fired power plants (CFPPs) under the Singapore-Asia Taxonomy, developed by the Green Finance Industry Taskforce. The proposed criteria comprise of facility and entity-level criteria and include inter alia that the facility must be phased out by 2040 and replaced by clean energy capacity, as well as that the entity must commit to no new development of CFPPs and a transition plan to full alignment to 1.5°C by 2030.
⁠
Link
⁠
⁠
⁠

Other transversal themes


Thailand launches digital platform for the issuance of private debt securities
The Stock Exchange of Thailand, the Association of Thai Securities Companies, the Thai Bankers' Association, the Securities and Exchange Commission (SEC), Capital Market Development Fund (CMDF) and the Thai Bond Market Association have launched the Digital Infrastructure for Capital Market (DIF) Web Portal, a digital platform for the issuance of private debt securities. The project forms part of the SEC's 4th Thai Capital Market Development Plan (2022-2027) and is supported by the CMDF. The DIF Web Portal is designed to increase the efficiency and transparency of the services of the Thai capital market, reduce costs, facilitate access to capital markets for fundraisers and investors, and enhance regulatory efficiency. The system has been piloted with 4 issuers and 16 sandbox participants, and is open to other issuers and market participants to test and create new investment innovations.
⁠
Link
⁠
⁠
⁠
Canadian Securities Regulators release framework for commodity benchmarks
The securities regulatory authorities of nine Canadian provinces and territories published advanced notice of implementation of the final amendments to Multilateral Instrument 25-102 Designated Benchmarks and Benchmark Administrators (MI 25-102). MI 25-102 currently sets out the framework for the designation and regulation of financial benchmarks and their administrators, as well as the regulation of benchmark contributors and of certain users of designated benchmarks. The amendments to MI 25-102 provide a framework for the designation and regulation of commodity benchmarks and the persons or companies that administer them and are intended to enhance the accuracy, integrity and reliability of designated commodity benchmarks and their administrators. The amendments are planned to come into force at the end of September this year.
⁠
Link
⁠
⁠
⁠
Ontario Securities Commission publishes report to help public accounting firms develop robust internal ethical policies and procedures
The Ontario Securities Commission (OSC) has published a report to assist public accounting firms in developing and implementing robust internal ethical policies and procedures and thus help to prevent ethical violations in the audits of financial statements of reporting issuers. Specifically, the report identifies several areas of focus for accounting firms’ ethics strategies, such as leadership, ethics education training, and whistleblower programs, as well as considerations to help firms comply with requirements related to the dating of audit working papers and internal professional training programs. The report follows the OSC’s announcement in fall last year to make targeted inquiries into certain public accounting firms that carry out audits of Ontario reporting issuers.
⁠
Link
⁠
⁠
⁠
CFTC establishes cybersecurity and environmental fraud task forces within its Enforcement Division
The Commodity Futures Trading Commission’s (CFTC) Division of Enforcement has established two new task forces: the Cybersecurity and Emerging Technologies Task Force and the Environmental Fraud Task Force. The Cybersecurity Task Force will address cybersecurity issues and other concerns related to emerging technologies, while the Environmental Fraud Task Force will combat environmental fraud and misconduct in derivatives and relevant spot markets, examining issues such as fraud with respect to the purported environmental benefits of purchased carbon credits, as well as registrants’ material misrepresentations regarding ESG products or strategies. The task forces are comprised of attorneys and investigators across different offices within the Enforcement Division, and will prosecute cases, serve as subject matter experts, and coordinate efforts with the CFTC’s other divisions and offices.
⁠
Link
⁠
⁠
⁠
Other highlights
The Canadian Securities Administrators (CSA) has confirmed that new SEDAR+ filing system will launch on July 25, 2023. SEDAR+ will be used by all market participants to file, disclose and search for issuer information in Canada’s capital markets. During the transition period, SEDAR will no longer be available for filing as of 11 p.m. ET on Thursday, July 20, 2023 and SEDAR+ will be available for filing at 7 a.m. ET on Tuesday, July 25, 2023.
⁠
Link
⁠
⁠
⁠

Leadership changes

The Bank for International Settlements (BIS) has appointed Maha El Dimachki as the new Head of the Innovation Hub Singapore Centre. She will start the new role on 1 October 2023, succeeding the current head Andrew McCormack.
⁠
Link
⁠
⁠
APRA’s Deputy Chair Helen Rowell steps down from her position after 10 years in the position and over 21 years at the organization in total. Rowell was the first woman appointed as an APRA Executive Director, Member and Deputy Chair.
⁠
Link
⁠
⁠
⁠

Leadership changes

The Monetary Authority of Singapore (MAS) and the National Bank of Rwanda (NBR) have partnered with the Business Development Fund of Rwanda (BDF) and Proxtera Pte Ltd to launch the Rwanda Imbaraga SME Ecosystem (RISE) programme. The initiative aims to equip SMEs in Rwanda with better capabilities to participate in domestic and cross-border trade opportunities, as well as enhanced access to trade financing.
⁠
Link
⁠
⁠
The Capital Market Authority (CMA) of the Sultanate of Oman has signed a MoU with the Astana Financial Services Authority (AFSA) of the Republic of Kazakhstan. The MoU is intended to facilitate cooperation and information exchange between the two authorities, including in relation to fintech, Islamic finance, asset management, capital markets, and financial culture.
⁠
Link
⁠
⁠
⁠
© 2023 REGXELERATOR

At a glance - Highlights by topic
Prudential & financial stability
AML & CFT
Cyber & operational resilience
Conduct & consumer protection
Fintech & ecosystem innovation
Payments & currency
ESG
Other transversal themes
Leadership changes
Leadership changes
Want to print your doc?
This is not the way.
Try clicking the ⋯ next to your doc name or using a keyboard shortcut (
CtrlP
) instead.