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In this regular update, we round-up FinTech-related financial services regulatory developments for the week ending 18 November 2022.


Recent updates from Herbert Smith Freehills include:



FSB: Final report on developing the implementation approach for the cross-border payments targets 

The Financial Stability Board (FSB) has published a final report on developing the implementation approach for the cross-border payments targets. The report provides an update on the FSB’s development of the framework for monitoring progress toward the G20 cross-border payments targets, a process which the FSB explains has been complicated by the multiplicity of data sources. The report sets out a high-level overview of the main data sources; a more detailed discussion of each key performance indicator (KPI) and, when able, the data underlying its calculation, including material gaps; the approach to operationalising the monitoring exercise; and next steps.

Given the lack of pre-existing indicators and the need for further discussions and collaboration with potential data providers to develop reliable estimates, this final report is not able to provide a full set of estimates of current performance. This will take several more months to further develop and will be published once available. [17 Nov 2022]

ISDA: Speech at Japan Derivatives Forum – crypto, DRR, ESG

The International Swaps and Derivatives Association (ISDA) has published a speech by Scott O’Malia, Chief Executive, at the Japan Derivatives Forum. In his speech, Mr O’Malia spoke about the three key priorities for ISDA: the growth of crypto derivatives; the digital regulatory reporting (DRR) initiative; and the continuing focus on ESG issues. On crypto specifically, Mr O'Malia noted that ISDA was 'well advanced' on producing standard terms for cash-settled forwards and options referencing Bitcoin and Ether. [15 Nov 2022]




BoE: Market wide simulation exercise - SIMEX 22

The Bank of England (BoE), in partnership with the FCA, HM Treasury (HMT) and 50 regulated firms, has undertaken a two-day UK market wide simulation exercise, referred to as SIMEX 22. The exercise set out to test the UK financial sector’s resilience to major operational disruption.

The exercise was developed by the Cross Market Operational Resilience Group (CMORG) which will consider the findings and ensure that collective capabilities are developed to mitigate any risks that are identified. [18 Nov 2022]

FCA CEO addresses UK Finance Annual Dinner on the Consumer Duty, AI, financial inclusion and innovation

The FCA has published the speech delivered by CEO Nikhil Rathi at the UK Finance Annual Dinner. Under the title 'Rolling Regulation Forwards', Mr Rathi covered the new Consumer Duty, how the FCA will regulate for the future and innovation, and financial inclusion.

On the Consumer Duty, the FCA CEO acknowledged that it will not guarantee a good outcome, but it does require firms to consider what a good outcome looks like and 'take decisions in good faith'. While implementation will require 'some heavy lifting upfront', the FCA expects that it will mean fewer reactive rules in the future.  Having assessed that firms appear to be on track with implementation, the FCA sees no need to move the implementation deadlines it has set. However, firms are asked to be open with the regulator about their implementation path.

From focusing on implementation of the Consumer Duty, Mr Rathi moved on to consider the role of artificial intelligence (AI) in the future of financial services, and how the Consumer Duty alongside the Senior Managers and Certification Regime (SMCR) will facilitate an appropriate regulatory response to use of the technology.

Mr Rathi continued on to discuss financial inclusion in his speech. Noting some speculation that the Consumer Duty might make firms more risk averse, he said that the FCA would be monitoring firms to ensure this does not happen and underscored the FCA's focus on vulnerable customers under the Consumer Duty. With regard to access, Mr Rathi particularly commented that the FCA wants to see 'banking hubs and alternative forms of provision accelerated and also for people and small businesses to be supported in moving to digital, where branches close in community'.

Concluding his remarks, the FCA CEO highlighted the regulator's leadership on financial innovation, from hosting crypto sprints to piloting the use of synthetic datasets to identify fraud typologies and respond earlier and more proactively.  He also said that in its capacity as chair of the Global Financial Innovation Network (GFIN), the FCA will launch a new global sprint focusing on ESG shortly.  [17 Nov 2022]




Autumn Statement - Financial services and technology

HM Treasury has published the Chancellor's speech presenting the Autumn Statement made in the House of Commons on Thursday 17 November, and related policy documents.

On economic stability, the Chancellor confirmed that the Government would not seek to change the monetary policy remit of the Bank of England (BoE).

On innovation, the Chancellor stated that by the end of 2023, the Government will decide and announce changes to EU regulations in five growth industries: digital technology, life sciences, green industries, financial services and advanced manufacturing.  The Autumn Statement adds that the Government will also task the Chief Scientific Adviser and National Technology Officer, Sir Patrick Vallance, to bring together the best minds to advise how the UK can better regulate emerging technologies, enabling their rapid and safe introduction.

The Chancellor also stated that the Government will legislate to give the Digital Markets Unit, which was established by the Competition and Markets Authority (CMA), new powers 'to challenge monopolies and increase competitive pressure to innovate'; the Autumn Statement indicates that the Digital Markets, Competition and Consumer Bill will be brought forward in the third Parliamentary session to provide these new powers.

The full Autumn Statement collection is available here. [17 Nov 2022]



Law Commission: Call for evidence on DAOs

The Law Commission has launched a call for evidence seeking information about how decentralised autonomous organisations (DAOs) can be characterised, and how the law of England and Wales might accommodate them now and in the future. In the call for evidence, the Law Commission sets out its current understanding of the landscape and asks for further information on a variety of issues, including:

  • when a DAO would choose to include an incorporated entity into its structure;
  • the status of a DAO’s investors / token-holders;
  • what kind of liability do or should developers of open-source code have (if any);
  • how does / should the distinction between an incorporated company (or other legal form or incorporated entity) involved in software development and an open-source smart contract-based software protocol operate as a matter of law;
  • the of structure governance and decision-making processes;
  • the application of money laundering, corporate reporting and other regulatory concepts;
  • tax liability; and
  • which jurisdictions are currently attractive for DAOs and why.

Responses are requested by 25 January 2023; these will inform the Law Commission's scoping report. [16 Nov 2022]




CLLS: Responses and comments on digital assets, digital securities and economic crime

The City of London Law Society (CLLS) has published the following:

  • response to the Law Commission's consultation on digital assets;
  • additional comments on consultation by the UK Jurisdiction Taskforce on the issuance and transfer of digital securities under English private law; and
  • paper on the Economic Crime and Corporate Transparency Bill 2022 prepared with the Law Society of England and Wales. [16 Nov 2022]


FCA: Future of Open Banking and the Joint Regulatory Oversight Committee - updated webpage

The FCA has updated its webpage on the future of Open Banking and the Joint Regulatory Oversight Committee to include the details from the committee meetings on 6 and 27 October 2022. At these meetings, the committee discussed the interim report on open banking priorities and its findings. The report provided a broad base of evidence and opinions from across the open banking ecosystem on the three key priorities identified by the committee:

  • unlocking the potential of Open Banking payments, e.g. through account-to-account retail transactions;
  • enabling end users to share data and manage access; and
  • developing further data sharing propositions, including for greater consumer protection and continuing interoperability. [15 Nov 2022]



FCA: Annual Public Meeting 2022 - responses to unanswered questions 

The FCA has published the responses to the unanswered questions from its Annual Public Meeting 2022. The responses relate, among other things, to the Financial Services and Markets Bill; Consumer Duty; and cryptoassets. [15 Nov 2022] 

FCA: Information for FTX customers

The FCA has issued a press release providing information for FTX Crypto Exchange customers. The FCA notes that UK customers of FTX may be concerned by news that it has filed for bankruptcy in the US and has been put into provisional liquidation in the Bahamas. The press release states that further details of what this means for FTX customers should be available in the coming days.

The FCA advises that in the UK, regulation of cryptoassets is limited to registering of UK-based crypto-asset exchanges for anti-money laundering (AML) purposes; as such, FTX was not authorised, regulated or registered by the FCA. [14 Nov 2022]

HoL Fraud Act 2006 and Digital Fraud Committee: Report on fighting fraud

The House of Lords (HoL) Fraud Act 2006 and Digital Fraud Committee has published its report Fighting Fraud: Breaking the Chain. The report explains that fraud makes up 41% of all crime against individuals in England and Wales. Digital technology has led to new opportunities for fraudsters, and Covid-19 accelerated this trend. The Committee makes a number of recommendations, including:

  • that HM Government (HMG) establish a cabinet subcommittee with a mandate to tackle fraud;
  • that the Online Safety Bill be brought forward as a matter of urgency;
  • that fraud be made a priority for the police;
  • the introduction of a new corporate criminal offence of 'failure to prevent fraud'; and
  • that the PSR consult on introducing a delay for processing certain high-risk payments to allow banks to 'review risk signals and contact their customer[s]'.

HMG's response to the report is due by 12 January 2022. [14 Nov 2022]





EC: Digital Services Act enters into force 

The European Commission (EC) has issued a press release to mark the entry into force of the Digital Services Act (DSA). The DSA requires online platforms to report the number of active end users on their websites within three months. The EC is also inviting all online platforms to notify to it the published numbers. Based on these user numbers, the EC will make an assessment as to whether a platform should be designated a very large online platform or search engine. Following such a designation, the entity in question will have four months to comply with the obligations under the DSA, including carrying out and providing the EC with an annual risk assessment exercise. EU Member States will need to empower their Digital Services Coordinators by 17 February 2024, the general date of entry in application of the DSA, when the DSA is fully applicable for all entities in its scope. [16 Nov 2022] 




Comments by MAS on

In response to media queries on, MAS stated that does not operate in Singapore. is neither licensed nor exempted from licensing in Singapore. It is not possible, however, to prevent Singapore users from directly accessing overseas service providers. was therefore able to onboard Singapore users. MAS has consistently reminded the public of the risks of dealing with unlicensed entities. [14 Nov 2022]

MAS and UNCDF sign MoU to develop integrated financial ecosystems for LDCs

MAS and the United Nations Capital Development Fund (UNCDF) have signed a Memorandum of Understanding (MoU) to jointly develop integrated and digital financial ecosystems for micro, small and medium enterprises (MSMEs) from least developed countries. The partnership will help MSMEs enhance their digitalisation capabilities and facilitate greater access to finance through open digital infrastructures. As a start, MAS and UNCDF will collaborate on developing the Pacific Islands Integrated Financial Ecosystem, to enable MSMEs and businesses in the Pacific Islands and Singapore to be more digitally connected. [14 Nov 2022]

Central Banks of Indonesia, Malaysia, Philippines, Singapore and Thailand sign MoU 

Bank Indonesia (BI), Bank Negara Malaysia (BNM), Bangko Sentral ng Pilipinas (BSP), MAS, and Bank of Thailand (BoT) have signed an MoU to strengthen and enhance cooperation in Regional Payment Connectivity to support faster, cheaper, more transparent, and more inclusive cross-border payments. The proposed cooperation will include a number of modalities, including QR code and fast payment. [14 Nov 2022]





BOT: Launch of Cross-border QR Payment Linkage between Viet Nam and Thailand

The President of the Socialist Republic of Viet Nam, along with Mr. Arkhom Termpittayapaisith, the Minister of Finance of Thailand, witnessed the official launch of the cross-border QR payment linkage between Viet Nam and Thailand. To illustrate the practical use case of this linkage, Mr. Nguyen Kim Anh, Deputy Governor of the State Bank of Viet Nam and Mr. Ronadol Numnonda, his counterpart from the Bank of Thailand (BOT), participated in live demonstrations of cross-border QR payments between Viet Nam and Thailand, using mobile banking applications of their respective countries.  [17 Nov 2022] 




OCC: Acting Comptroller emphasizes caution with crypto

The Office of the Comptroller of the Currency (OCC) has published   the remarks of Acting Comptroller of the Currency, Michael J. Hsu, at the Financial Literacy and Education Commission’s Public Meeting. In his remarks, Mr Hsu discussed the continued risks of crypto to consumers and emphasized the OCC’s careful and cautious approach to crypto that has helped mitigate the risk of contagion to the banking system.  [17 Nov 2022]

Treasury report calls for enhanced oversight of the consumer financial activities of non-bank firms, including fintechs

The US Department of the Treasury, in consultation with the White House Competition Council, has released a report entitled Assessing Impacts of New Entrant Non-bank Firms on Competition in Consumer Finance Markets. The report finds that, while concentration among federally insured banks is growing, new entrant non-bank firms, in particular fintech firms, are adding significantly to the number of firms and business models competing in core consumer finance markets and appear to be contributing to competitive pressure. While these fintech firms are enabling new capabilities, they are also creating new risks to consumer protection and market integrity, such as risks related to data privacy and regulatory arbitrage. To protect consumers in these rapidly changing markets and enable sustainable competition, among other recommendations, the report calls for enhanced oversight of the consumer financial activities of non-bank firms.  [16 Nov 2022] 

NYIC to explore feasibility of theoretical payments system designed to facilitate and settle digital asset transactions

The Federal Reserve Bank of New York (NYFed) has announced that its New York Innovation Center (NYIC) will participate in a proof-of-concept project to explore the feasibility of an interoperable network of central bank wholesale digital money and commercial bank digital money operating on a shared multi-entity distributed ledger. This US proof-of-concept project is experimenting with the concept of a regulated liability network. It will test the technical feasibility, legal viability, and business applicability of distributed ledger technology to settle the liabilities of regulated financial institutions through the transfer of central bank liabilities. [15 Nov 2022] 



NYIC and MAS collaborate to explore potential enhancements to cross-border payments using wholesale CBDCs

The NYIC and the Monetary Authority of Singapore (MAS) have announced Project Cedar Phase II x Ubin+, a joint experiment to investigate how wholesale central bank digital currencies (wCBDCs) could improve the efficiency of cross-border wholesale payments involving multiple currencies. Project Cedar Phase II x Ubin+ will enhance designs for atomic settlement of cross-border cross-currency transactions, leveraging wCBDCs as a settlement asset. The effort, which entails establishing connectivity across multiple heterogeneous simulated currency ledgers, aims to significantly reduce settlement risk, a key pain point in cross-border cross-currency transactions.  [10 Nov 2022]





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Karen Anderson

Consultant, London

Karen Anderson
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Cat Dankos

Regulatory Consultant, London

Cat Dankos

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Karen Anderson photo

Karen Anderson

Consultant, London

Karen Anderson
Cat Dankos photo

Cat Dankos

Regulatory Consultant, London

Cat Dankos
Karen Anderson Cat Dankos