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Global Regulator & Central Bank News Roundup (Vol. 31/2023)

August 14 - August 20 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
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At a glance - Highlights by topic


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Prudential & financial stability
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Swiss National Bank Restructures Data Disclosure Following UBS Group's Acquisition of Credit Suisse Group AG
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AML & CFT
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Labuan IBFC Launches First Anti-Money Laundering and Counter Terrorism Financing Compliance Platform to strengthen AML/CFT compliance
FinCEN and IRS CI Note Rise in Payroll Tax Evasion, Workers' Compensation Fraud in Construction Industry
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Conduct & consumer protection
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UK PSR Launches Consultations on New APP Fraud Reimbursement Policy
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Fintech & ecosystem innovation
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MAS Completes Regulatory Framework for Stablecoins, Setting Stricter Requirements for Issuers in Singapore
AFSA Seeks Market Feedback on Proposed AIFC Stablecoin Framework
UK FCA Details Expectations For UK Cryptoasset Businesses’ Compliance with the Travel Rule
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Payments & currency
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UK FCA Granted Enhanced Powers to Safeguard Cash Services Amidst Digital Shift Under Financial Services & Markets Act 2023
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ESG
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Taiwan FSC Issues Roadmap for Taiwan Listed Firms to Align with International Sustainability Disclosure Standards by 2026
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Other transversal themes
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FSB Launches Thematic Peer Review on MMF Reforms, Urges Stakeholder Feedback to Address Sector Vulnerabilities
Indonesia's OJK Issues New Regulation to Strengthen Capital Market Amid Unstable Conditions
Saudi Arabian Monetary Authority announces formation of new Insurance Authority
FDIC's 2023 Risk Review Explores Current Economic Climate, Banking Industry Conditions, and New Focus on Crypto-Asset Risk
Federal and State Regulatory Agencies Pledge Support to Financial Institutions Adversely Affected by Hawaii Wildfires

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Prudential & financial stability


Swiss National Bank Restructures Data Disclosure Following UBS Group's Acquisition of Credit Suisse Group AG
The Swiss National Bank (SNB) has announced modifications to its data offering following the acquisition of Credit Suisse Group AG by UBS Group AG on 12 June 2023. As the big banks category now consists of only one group, the SNB will no longer disclose figures for this category to maintain data confidentiality. Moreover, data for other bank categories will also cease to be published to prevent inferences being made about the big banks category. From 30 June 2023, only the total of 'All Banks' will be released. The SNB is considering the option of releasing previous bank category totals for certain data in the future, and it is also in the process of assessing alternative breakdowns.
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AML & CFT


Labuan IBFC Launches First Anti-Money Laundering and Counter Terrorism Financing Compliance Platform to strengthen AML/CFT compliance
The Labuan International Business and Financial Center (Labuan IBFC) has its first Anti-Money Laundering & Counter Terrorism Financing (AML/CFT) compliance platform, the Labuan Bank Compliance Officers' Networking Group (LB-CONG). In collaboration with the Labuan Financial Services Authority, the Association of Labuan Banks (ALB), and the Labuan Investment Banks Association (LIBA), the platform was formed as a dedicated place for Labuan banking institutions to discuss matters related to AML/CFT compliance and best practices and is expected to strengthen the AML/CFT compliance culture within the Labuan IBFC. The formation of LB-CONG signifies an important milestone as it encourages higher AML/CFT compliance standards in the Labuan banking industry.
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FinCEN and IRS CI Note Rise in Payroll Tax Evasion, Workers' Compensation Fraud in Construction Industry
The Financial Crimes Enforcement Network (FinCEN) and the IRS Criminal Investigation (CI) have issued a notice to financial institutions drawing attention towards a rise in payroll tax evasion and workers' compensation insurance fraud in the US real estate construction industries. The illicit activities, carried out primarily through banks and check cashers, have led to state and federal tax authorities losing hundreds of millions of dollars annually. This notice aims at providing information that can help financial institutions stay vigilant in detecting suspicious activities and partake in curbing tax and insurance fraud. The notice outlines the potential schemes, allied red flag indicators, and specific Suspicious Activity Report (SAR) filing instructions. This move aligns with FinCEN's previous efforts against the use of shell companies in unlawful activities, supporting the beneficial ownership information reporting requirement issued under the Corporate Transparency Act last year.
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Conduct & consumer protection


UK PSR Launches Consultations on New APP Fraud Reimbursement Policy
The UK Payment Systems Regulator (PSR) has initiated two consultations prior to implementing its new authorised push payment (APP) fraud reimbursement policy. Key focus areas for the consultations, which is open until 12 September, include defining the maximum level of reimbursement and claim excess, as well as setting out a rigorous consumer standard of caution. In terms of the consumer standard of caution, it has proposed three requirements: for consumers to heed bank warnings about potential fraudsters; for consumers to report suspected scams promptly, typically within 13 months of the last fraudulent payment; and for consumers to comply with any reasonable requests for information from their bank. Consumer negligence, unless gross in nature, will not prevent reimbursement, unless it is demonstrated that the consumer failed to meet one or more of these requirements. The PSR expects to finalize and release the additional guidance for the final claim excess and maximum level of by the end of 2023, ahead of the authorised push payment fraud reimbursement requirements coming into force in 2024.
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Fintech & ecosystem innovation


MAS Completes Regulatory Framework for Stablecoins, Setting Stricter Requirements for Issuers in Singapore
The Monetary Authority of Singapore (MAS) has finalised its regulatory framework for stablecoins, i.e. digital payment tokens that maintain a constant value against one or more specified fiat currencies. The framework applies to single-currency stablecoins that are pegged to the Singapore Dollar or any G10 currency and are issued in Singapore. Under the framework, issuers of such stablecoins must meet key requirements pertaining to value stability, capital, redemption at par, and disclosure. Among other things, under the new framework, reserve assets must be subject to requirements relating to their composition, valuation, custody and audit and issuers are obliged to return the par value of single-currency stablecoins to their holders within five business days from the receipt of a redemption request. Only those issuers that meet all criteria can apply to have their stablecoins recognised as "MAS-regulated stablecoins". This label differentiates MAS-regulated stablecoins from other digital tokens, and misrepresentation of a token as an MAS-regulated stablecoin can incur penalties. Deputy Managing Director (Financial Supervision) at MAS, Ms. Ho Hern Shin, encourages stablecoin issuers to prepare for compliance to facilitate the use of stablecoins as a credible digital medium of exchange.
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AFSA Seeks Market Feedback on Proposed AIFC Stablecoin Framework
The Astana Financial Services Authority (AFSA) has issued a new consultation paper to seek market feedback on the proposed AIFC Stablecoin Framework. This framework includes draft rules for authorised firms operating money services related to digital assets and issuing Fiat stablecoins. The consultation paper is divided into four parts: Background, proposals, public consultation questions and the draft rules in the Annex. Both current and prospective market players are invited to share their views on the issues raised in Part III of the paper until 15 September 2023.
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UK FCA Details Expectations For UK Cryptoasset Businesses’ Compliance with the Travel Rule
The UK Financial Conduct Authority (FCA) has further detailed its expectations towardsr UK-based cryptoasset businesses in relation to compliance with the 'Travel Rule' with the release of new draft guidance. Under the guidance, when sending cryptoassets to with jurisdictions that have not adopted the Travel Rule, UK cryptoasset businesses are required to make exhaustive efforts to determine if the recipient firm can procure the necessary information. If the recipient is unable to, the UK business remains obligated to collect, verify, and store the requisite information as per the Money Laundering Regulations (MLRs) prior to initiating the transfer. Similarly, for inbound cryptoasset transfers from regions not adhering to the Travel Rule, and which have incomplete or absent information, UK cryptoasset businesses are urged to assess the implementation status of the Travel Rule in the countries they transact with. This evaluation will subsequently inform a risk-based judgment regarding the release of the cryptoassets to the intended beneficiary. Feedback to the guidance can be provided by 25 August. Businesses are expected to comply with the Travel Rule expectations by From 1 September 2023.
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Payments & currency


UK FCA Granted Enhanced Powers to Safeguard Cash Services Amidst Digital Shift Under Financial Services & Markets Act 2023
The Financial Conduct Authority (FCA) is set to acquire new powers under the Financial Services & Markets Act 2023 to ensure a reasonable provision of cash deposit and withdrawal services. These measures address the evolving needs of the UK market where, despite most of the population having access to free cash withdrawal points, the shape of the banking industry is rapidly changing. Technological advances have led to an increase in cashless payments, yet cash remains crucial for a segment of the population, particularly vulnerable consumers and small businesses. Consequently, the FCA aims to maintain a network of cash access facilities in line with the current distribution of services. They plan to propose rules that focus on areas where deficiencies would significantly impact consumers and businesses, including closing gaps in cash provision, and promoting investment in shared solutions for digital and cash payments. The rules will require banks and building societies to assess the reasonableness of cash provision during major changes such as branch closures or removal of ATMs. The FCA’s new powers, however, do not extend to cash acceptance. Retailers are not obligated to accept cash payments for goods or services. The FCA expects to roll out these new rules by summer 2024 and in the interim, the Consumer Duty, which sets a higher protection standard for banking customers, came into effect in July 2023.
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ESG


Taiwan FSC Issues Roadmap for Taiwan Listed Firms to Align with International Sustainability Disclosure Standards by 2026
The Financial Supervisory Commission (FSC) has issued a roadmap for Taiwan listed companies to adhere to IFRS Sustainability Disclosure Standards. After gathering feedback from various stakeholders, including listed companies, audit firms, academics and experts, the FSC has finalized its approach to alignment, target entities, the timeline, and content of the disclosures. Effective 2026, the FSC will adopt the IFRS S1 and S2 disclosure standards. The applicability of subsequent standards will be evaluated upon their issuance by the International Sustainability Standards Board (ISSB). The FSC will progressively begin requiring Taiwan listed companies to comply with these standards from FY2026. The phased implementation will first cover large-cap companies, followed by companies whose capital ranges between NT$ 5 billion and NT$ 10 billion, and eventually incorporating all other listed entities. In terms of disclosure location and timing, the FSC will amend existing regulations to require companies to include this sustainability information in their annual reports, in sync with the release of their financial statements. The FSC will provide some flexibility for companies in the initial years of adopting these new standards, allowing for a phased approach and qualitative information disclosure for certain complex matters. To support the transition, the FSC has established a task force that will work through 2027 to build listed companies' capacity. Comprising four working groups, the task force will focus on adopting ISSB standards, enhancing implementation mechanisms, adjusting regulations, and promoting education. Resources will also be made available on the IFRS Sustainability Standards Alignment website.
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Other transversal themes


FSB Launches Thematic Peer Review on MMF Reforms, Urges Stakeholder Feedback to Address Sector Vulnerabilities
The Financial Stability Board (FSB) is undergoing a thematic peer review of money market fund (MMF) reforms as part of its initiative to address and evaluate vulnerabilities in the non-bank financial intermediation sector. The objective of the review is to gauge the progress of FSB member jurisdictions in strengthening resilience in response to the 2021 FSB policy proposals, with the review intended to take into account both the evidence-based explanations of these vulnerabilities and related policy decisions. To better understand the landscape, FSB is inviting stakeholders' feedback about disparities in MMF vulnerabilities across jurisdictions, assessing the progress made in mitigating the same, and exploring the operational difficulties industry players face in implementing MMF reforms. A detailed overview of the thematic reviewcan be found in the Summary Terms of Reference. Feedback, which will be kept confidential, is requested by September 8, 2023 with an anticipated publication of the peer review report by the end of the same year.
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Indonesia's OJK Issues New Regulation to Strengthen Capital Market Amid Unstable Conditions
The Financial Services Authority of Indonesia (OJK) has issued a new regulation with a view to enhancing the performance and stability of the capital market amid unstable market conditions. Specifically, the new regulation addresses capital market challenges that may arise as a result of crises, pandemics or adverse global or domestic sentiment and seeks to mitigate their impact on the market. To that end, the new regulation - Number 13 of 2023 (POJK 13/2023) – authorizes OJK to implement measures such as market volatility management, stimulus provision, and relaxation for financial services industry players in the face of such circumstances.
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Saudi Arabian Monetary Authority announces formation of new Insurance Authority
In a new press release, the Saudi Arabian Monetary Authority (SAMA) has confirmed that it has received cabinet’s approval for the establishment of a new dedicated Insurance Authority. The new Authority will be set up as an independent entity, mandated to oversee and regulate the insurance sector's operations while also fostering development of the insurance sector. SAMA’s Governor lauded the decision as evidence of leadership's commitment to tap into the full potential of the insurance sector, thereby strengthening the national economy and promoting robust risk management systems.
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Federal and State Regulatory Agencies Pledge Support to Financial Institutions Adversely Affected by Hawaii Wildfires
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Hawaii Department of Commerce and Consumer Affairs’ Division of Financial Institutions, the National Credit Union Administration, and the Office of the Comptroller of the Currency collectively have issued an interagency statement in response to the adverse impact of the recent Hawaii wildfires on financial institutions and their customers. To assist affected institutions, the agencies have pledged to provide suitable regulatory aid. As part of their statement, the agencies encourage institutions in the affected areas to cater to the financial necessities of their communities. Institutions are advised to constructively collaborate with borrowers in wildfire-affected communities and any judicious efforts to revise terms on existing loans should not be subjected to examiner criticism. Furthermore, recognising the operational challenges in reopening facilities post-wildfires, agencies will expedite requests to operate temporary facilities. The agencies also promise leniency, with no intention to impose penalties or enforce supervisory actions against institutions that face difficulties in meeting reporting obligations provided the institutions make a reasonable attempt to comply. Finally, the agencies also advised that financial institutions may be eligible for Community Reinvestment Act (CRA) consideration for activities that revitalize or stabilize federally designated disaster areas.
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FDIC's 2023 Risk Review Explores Current Economic Climate, Banking Industry Conditions, and New Focus on Crypto-Asset Risk
The Federal Deposit Insurance Corporation (FDIC) has published the 2023 edition of its Risk Review. The review provides a comprehensive overview of current conditions in the U.S. economy, financial markets, and banking industry, detailing the key developments and risks in the U.S. banking system, with a special focus on community banks, as they come under the FDIC's primary federal regulation. The new edition also includes a dedicated section on crypto-asset risks.
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Leadership changes

The European Insurance and Occupational Pensions Authority's (EIOPA) Board of Supervisors has appointed Ms Teija Korpiaho, currently the Chief Adviser of Insurance Supervision at the Finnish Financial Supervisory Authority (FI-FSA), to the EIOPA Management Board for a two-and-a-half year term, replacing Ms Åsa Larson, the Executive Director of Insurance at the Swedish Financial Supervisory Authority, who has completed her second term.
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The Hong Kong Insurance Authority has reappointed Mr. Clement Cheung as its Chief Executive Officer for a term of three years.
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International cooperation

The Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market (ARDFM) has joined the International Association of Insurance Supervisors' (IAIS) Multilateral Memorandum of Understanding (MMoU).
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The Securities and Exchange Regulator of Cambodia (SERC) and the Lao Securities Commission Office (LSCO) have signed a MoU to foster cooperation between the two entities including in relation to the regulation and development of their respective capital markets.
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The Reserve Bank of India (RBI) and the Central Bank of UAE (CBUAE) have signed two MoUs to facilitate cross-border transactions and payments between the two countries. The first MoU outlines a framework for the use of local currencies, the Indian rupee (INR) and the UAE Dirham (AED), opposing the use of US Dollars for international transactions. The second MoU revolves around 'Payments and Messaging Systems', including plans to link India's Unified Payments Interface (UPI) with the UAE’s Instant Payment Platform (IPP), respective Card Switches, and exploring the connection of payment messaging systems.
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The Swiss Financial Market Supervisory Authority (FINMA) the Bank of Italy and the Italian Commissione Nazionale per le Società e la Borsa (CONSOB) have formalized a joint MoU to strengthen their joint supervisory efforts and support more effective cooperation and information exchange.
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© 2023 REGXELERATOR

At a glance - Highlights by topic
Prudential & financial stability
AML & CFT
Conduct & consumer protection
Fintech & ecosystem innovation
Payments & currency
ESG
Other transversal themes
Leadership changes
International cooperation
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