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In this regular post, we round-up FinTech-related financial services regulatory developments for the week ending 20 October 2023.




CPMI consults on FPS interlinking

The Committee on Payments and Market Infrastructures (CPMI) has published an interim consultative report (ICR) as part of the G20 cross-border payments programme which describes initial considerations on governance and oversight for fast payment system (FPS) interlinking across borders.

The CPMI is inviting general feedback on ten initial considerations, developed from a series of global stakeholder workshops undertaken by the CPMI to better understand the sensitivities, complexities and experiences involved in FPS interlinking.

Responses are requested by 13 December 2023.

Together with the additional insights to be gained from further engagement with stakeholders and their written feedback on this interim report, the CPMI will submit a final report to the G20 on governance and oversight of FPS interlinking arrangements. [18 October 2023]

#FPSInterlinking #Payments

CPMI: Harmonised ISO 20022 data requirements for enhancing cross-border payments

The CPMI has published its final report on harmonised ISO 20022 data requirements for enhancing cross-border payments. The data requirements, a key element of the G20 cross-border payments programme, were developed with the private sector Payments Market Practice Group (PMPG). They will facilitate the straight through processing of end-to-end payments, making them faster and more reliable. The CPMI will continue its engagement with payment system operators and financial institutions to foster the implementation of the harmonised data requirements by the end of 2027. It will also consider how consistent implementation can be assured in future as the payments landscape evolves. [17 Oct 2023]

#ISO20022 #Payments

BCBS consults on disclosure of cryptoassets exposures

The Basel Committee on Banking Supervision (BCBS) has issued a Consultation Paper (CP) on the disclosure of banks' cryptoasset exposures. This follows its prudential standard on the treatment of cryptoasset exposures, finalised in December 2022. The CP proposes a standardised disclosure table and set of templates for banks' cryptoasset exposures, with a proposed implementation date of 1 January 2025.

Under the proposals, banks would be required to disclose qualitative information on their activities related to cryptoassets and quantitative information on exposures to cryptoassets and the related capital and liquidity requirements. Banks would also be required to provide details of the accounting classifications of their exposures to cryptoassets and cryptoliabilities. The BCBS expects that a common format for disclosures will support the exercise of market discipline and help to reduce information asymmetry between banks and market participants.

Responses are requested by 31 January 2024. [17 Oct 2023]

#Prudential # Crypto


BoE: Minutes of CBDC Engagement Forum

The Bank of England (BoE) has published the minutes of the Central Bank Digital Currency (CBDC) Engagement Forum meeting on 18 September. At the Forum:

  • members stressed the importance of continuing to engage the public on the digital pound proposals;
  • the BoE presented findings from Project Rosalind, a project run jointly with the Bank for International Settlements Innovation Hub (BISIH) London centre, which sought to design an application programme interface (API) prototype for retail CBDCs, along with a set of API standards; and
  • HM Treasury (HMT) set out high level information on the Digital Pound design phase and confirmed that a response to the February 2023 consultation would be published 'later' in 2023. [20 Oct 2023]

#DigitalPound #CBDC

PSR: Speech on Open Banking

The Payment Systems Regulator (PSR) has published a speech by its Head of Policy, Kate Fitzgerald, on Open Banking at the Open Banking Expo. Ms Fitzgerald discussed the future challenges and opportunities for Open Banking as well as the progress made so far by the PSR. [19 Oct 2023]

#OpenBanking #PSR

BoE: RTGS and CHAPS annual report 2022/23

The Bank of England (BoE) has published its 2022/23 annual report for Real-Time Gross Settlement (RTGS) and Clearing House Automated Payment System (CHAPS). The report provides an introduction to RTGS and CHAPS and discusses the BoE 's four strategic themes for delivery of the RTGS and CHAPS service: (i) safe and resilient; (ii) well-run; (iii) responsive; and (iv) renewed.

The BoE states that it is in a crucial phase of engagement with industry, seeking input on future development of RTGS spanning alternative and resilient messaging channels, considerations around extending operating hours for RTGS/CHAPS, as well as synchronisation.

Looking ahead, the report comments that the RTGS Renewal Programme continues to progress at pace, building on the adoption of ISO 20022 for CHAPS payments in June 2023. Under the next phase, it will move to a new ledger and core settlement engine for RTGS in Summer 2024 – this is aimed at delivering a more resilient, flexible and innovative sterling settlement system to support monetary and financial stability. [19 Oct 2023]


FCA/JROC: OBL publication of data frameworks for levelling up and mitigating financial crime risks

The FCA has issued a press release stating that the Joint Regulatory Oversight Committee (JROC) welcomes Open Banking Limited's (OBL's) submission of two data collection frameworks on the themes of ‘Levelling up availability and performance’ and ‘Mitigating the risks of financial crime’.

Levelling up availability and performance – the data will give insight on how often outages happen and provide OBL the opportunity to investigate whether further clarification or changes to the API standards are needed. The framework utilises a four phased approach to the delivery of the required data metrics over time, based on the depth and complexity of the requirement.

Mitigating the risks of financial crime – this will enhance financial crime reporting. Specifically, building on existing reporting requirements, the framework will collect data on the total open banking payments by volume and value, and the total open banking fraud volume and value each on a monthly basis.

The provision of these frameworks marks the completion of the first two deliverables under the four themes that OBL was asked to consider by the  JROC in its April 2023 publication Recommendations for the next phase of open banking in the UK. [18 Oct 2023]

#OpenBanking #FinancialCrime #Data

UKJT consults on digital assets and English insolvency law

The UK Jurisdiction Taskforce (UKJT) has issued Consultation Paper: Digital Assets and English Insolvency Law (CP). The CP examines the way in which English insolvency law applies to digital assets and seeks feedback to inform the development of a Legal Statement on Digital Assets and English Insolvency Law.

Responses are requested by 4 December 2023. [18 Oct 2023]

#DigitalAssets #Insolvency

FCA CEO comments on new competitiveness and growth objective at City Dinner

The FCA has published a speech by Nikhil Rathi, CEO, delivered at the City Dinner 2023 at the Mansion House. The focus of the speech was the FCA's new secondary objective to support international competitiveness and growth over the medium to long term. The FCA highlighted a number of key takeaways from the speech, including, with regards to technology, the FCA's investment in digital and data infrastructure. Mr Rathi also noted the intention to make more of the FCA Handbook machine readable and expressed admiration for the ability of the Reserve Bank of India (RBI) to trial innovations at scale, with trial and error being an accepted part of the process of innovation. [17 Oct 2023]

#MachineReadable #Data

BoE: IEO evaluation of the use of data to support policy objectives

The BoE has published the Independent Evaluation Office's (IEO's) evaluation of the BoE's use of data to support its policy objectives. The evaluation was commissioned by the Court of Directors in October 2022 to consider whether the BoE's data capabilities remain fit for purpose given the pace of innovation in data and analytics such as the capabilities of large language models. The IEO makes ten detailed recommendations, grouped into three broad themes:

  • committing to a clear vision for data and analytics, supported by a comprehensive strategy and effective governance;
  • overcoming the institutional, cultural and technological barriers to keep the BoE's data and analytical practices in step with new and emerging data-centric ways of working; and
  • ensuring the BoE's staff have the support and skills they need to work effectively with data. [17 Oct 2023]

#DataAnalytics #Innovation #LargeLanguageModels

House of Commons: Answer to written question on cryptocurrencies

For the HMT, Economic Secretary Andrew Griffith has provided a written statement in response to the question posed by Julie Elliott, MP, on what steps the Chancellor is taking to encourage cryptocurrency companies to operate in the UK. The response mentions the UK's plans to 'harness the benefits of crypto technologies' and that HMG is taking forward a number of measures to both foster innovation and implement a regulatory framework that encourages responsible participation in cryptoasset markets. The response also mentions the recent HMT consultation on proposals for cryptoasset regulation and notes that HMG will provide a response in due course. [16 Oct 2023]



ESMA and EBA consult on two draft Joint Guidelines on suitability assessments of the management body and holders of qualifying holdings under MiCAR

The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) have issued a joint Consultation Paper (CP) on the following:

The guidance will provide clarity and harmonisation with respect to the criteria to assess the suitability of the management body, the shareholders and members with qualifying holdings, thus reducing the risk of arbitrage in the application of the rules.

Responses are requested by 22 January 2024. [20 Oct 2023]


EBA consults on draft RTS and Guidelines for ART issuers under MiCAR

The EBA has issued CPs on the following draft regulatory technical standards (RTS) and guidelines:

Responses are requested by 22 January 2024. [20 Oct 2023]


ESMA: Chair discusses being ready for the digital age

ESMA has published a speech by its Chair Verena Ross delivered at the 2023 Operations, Post-Trade, Technology & Innovation Conference (OPTIC). Ms Ross discussed the opportunities that new technologies bring, for both market participants and supervisors, in terms of improving efficiency, decision-making and reducing compliance costs for the market.

On ESMA's data strategy, Ms Ross noted significant progression in the standardisation of the reporting and ESMA's international contributions, in particular towards the development of the Legal Entity Identifier (LEI), Unique Transaction Identifier (UTI), and others. Looking ahead, Ms Ross highlighted the importance of data driven supervision and ESMA's intent to strengthen its cooperation with national competent authorities (NCAs), including ESMA's commencement of projects using AI to monitor market abuse. Ms Ross also spoke about MiCAR, the distributed ledger technology (DLT) pilot, and shortening settlement cycles. [18 Oct 2023]


ECB report: A stocktake on the digital euro

The ECB has published a press release providing an update on the digital euro project. Highlights include:

  • that the Governing Council is to start the digital euro preparation phase following conclusion of a two-year investigation phase on design and distribution of a digital euro;
  • the preparation phase will lay the foundations for a potential digital euro, with work to include finalising the rulebook and selecting providers to develop platform and infrastructure; and
  • the preparation phase will pave the way for a potential future decision on issuing a digital euro. [18 Oct 2023]


EDPS/EDPB: Joint opinion on the digital euro

The European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) have issued a Joint Opinion on the proposed Regulation on the digital euro as a central bank digital currency (CBDC). The EDPB and the EDPS acknowledge that the proposed Regulation addresses many data protection aspects of the digital euro, notably by addressing an offline modality to minimise the processing of personal data. In particular, they strongly welcome that digital euro users will always have the choice to pay in digital euros or in cash. At the same time, the EDPB and the EDPS make several recommendations to better ensure the highest standards of personal data protection and privacy, including:

  • advising that the ECB and national central banks should assess whether the single access point in the proposed Regulation is necessary and proportionate;
  • demonstrating the necessity of the fraud detection and prevention mechanism (FDPM), which, in the view of the EDPB and EDPS, lacks foreseeability;
  • introducing into the Regulation a ‘privacy threshold’ for online transactions; and
  • clarifying in the Regulation the data protection responsibilities of the ECB and of the payment service providers (PSPs). [18 Oct 2023]

#DigitalEuro #CBDC

EC: Rationalisation of reporting requirements - green, digital and economic thematic areas

The European Commission (EC) has published a Call for Evidence (CfE) seeking views on its proposals to rationalise and simplify reporting requirements for companies and administrations, for each of the green, digital and economic thematic areas. The aim of the proposals is to reduce burdensome reporting requirements by 25%, without undermining the related policy objectives, in the interests of improve the competitive position of EU businesses in global markets.

Responses are requested by 28 November 2023. [18 Oct 2023]

#DigitalReporting #CBDC

EC: ADR legislative proposals 

The EC has adopted a legislative proposal under its 2024 Work Programme for revision of the Alternative Dispute Resolution Directive (ADR Directive) by means of:

  • legislative proposal amending the current ADR Directive,
  • legislative proposal to repeal the online dispute resolution (ODR) Regulation,
  • recommendation addressed to online marketplaces and EU trade associations having a dispute resolution mechanism and to Member States.

The objectives of the review are to:

  • make the ADR framework fit to the digital markets by covering all categories of disputes concerning EU consumer rights;
  • improve the access to ADR in cross-border disputes through the use of digital tools, assistance to consumers and traders;
  • simplify ADR procedures to all actors; including reducing reporting obligations of ADR entities and information obligations of traders whilst encouraging traders to increase their engagement in ADR claims through the duty to reply;
  • discontinue the ODR platform and replace it by user-friendly digital tools to assist consumers in finding a redress tool to resolve their dispute;
  • incentivise online marketplaces and EU trade associations having a dispute resolution mechanism to get aligned with the quality criteria in the ADR Directive.

The proposal includes: an Impact assessment report (with Executive Summary) and Subsidiarity Grid; and an EC report on the application of the ADR Directive for consumer disputes and Regulation (EU) No 524/2013 on ODR for consumer disputes. [18 Oct 2023]


ESMA clarifies timeline for MiCAR and encourages market participants and NCAs to start preparing for the transition

ESMA has published a letter and statement to encourage preparations for a smooth transition to MiCAR. In the letter addressed to the Economic and Financial Affairs Council (ECOFIN), ESMA Chair, Verena Ross, calls on Member States to designate without delay the competent authorities responsible for carrying out the functions and duties provided for under MiCAR, and to consider limiting the optional grand-fathering period to 12 months, should they choose to offer it in their jurisdictions.

The statement is addressed to entities providing crypto-asset services and the national competent authorities (NCAs) that will be responsible for their supervision; it lists expectations for each from now until the end of the MiCAR transitional period. NCAs are encouraged to dedicate resources and align their supervisory practices with those of their EU counterparts to provide effective supervision from day one. Market participants are encouraged to begin planning towards a smooth transition and ensure their clients are aware of the regulatory status of their ‘grand-fathered’ crypto-asset offerings. The statement also reminds consumers of the risks associated with holding or investing in crypto-assets both until and after MiCAR enters into application. [17 Oct 2023]

#MiCAR #Crptoassets

ECB: Occasional paper on the future of DAOs in finance

The ECB has published an Occasional Paper (OP) on the decentralised autonomous organisation (DAO) as a way of structuring decentralised finance (DeFi) projects. The OP introduces the DAO structure and how it relates to other methods of organisation in finance. The paper lists use cases and describes the benefits and drawbacks of the DAO structure, taking a closer look at (inter)national regulatory frameworks, guidelines and recommendations in order to discuss whether, how and to what extent DAOs might comply.

The views expressed in the OP are those of the authors and do not necessarily reflect those of the ECB. [17 Oct 2023]

#DAO #DeFi

EC: 2024 Work Programme

The EC has published its 2024 Work Programme which sets out its key initiatives for the year ahead. The programme includes new initiatives around the European Green Deal and the Digital Age, including a proposal to amend the European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB) with respect to facilitating data sharing and re-use by financial sector authorities in order to reduce the reporting burden on firms.

#EC #2024WorkProgramme #DataSharing


ACCC Chair addresses the Digital Summit 2023

The Chair of Australian Competition & Consumer Commission (ACCC), Ms Gina Cass-Gottlieb, gave a speech on the Regulator’s priorities and challenges posed by the digital economy. The ACCC Chair discussed competition and consumer issues arising from data practices of digital platforms and the Regulator’s recommendations in response to these concerns, emerging issues involving generative AI, and a proposed change to the legal test when assessing mergers to accommodate a greater focus on data-rich companies.  [17 Oct 2023]

#Data #AI

Treasury: Regulating digital asset platforms – proposed regulatory framework

The Treasury has announced that the government intends to introduce a regulatory framework to address consumer harms in the crypto ecosystem while supporting innovation. The proposed regulatory framework would apply to digital asset platforms that present similar risks to entities that operate in the traditional financial system. It proposes to leverage the Australian financial services framework to regulate digital asset platforms to ensure consistent oversight and safeguards for consumers. Comments on the Proposal Paper are requested by 1 December 2023.  [16 Oct 2023]


ASIC enforcement activity in 2022 – 23

ASIC’s 2022–23 Annual Report reveals that that it commenced more than 130 new investigations in 2022–23. Key outcomes for ASIC from the 2022–23 period include. among other things, reviewing the cyber resilience practices of Australian business, and focusing on scam preventions and detection by major banks.  [16 Oct 2023]

#CyberResilience #Scams

Hong Kong

SFC and HKMA issue updated joint circular on intermediaries' VA-related activities

The SFC and the HKMA have issued an updated joint circular (with appendices) on intermediaries' virtual asset (VA)-related activities.

When the SFC formulated its regulatory approach for VAs in 2018 (see our previous update), it imposed an overarching “professional investors (PIs) only” restriction on various types of activity, including the distribution of VA funds.  Since then, the VA landscape has evolved rapidly and begun to expand into mainstream finance.  The SFC has also allowed SFC-licensed VA trading platforms to serve retail investors since 1 June 2023 (see our briefings of February and May 2023), and has authorised VA futures exchange traded funds for public offering in Hong Kong.

The SFC and the HKMA have therefore updated its guidance in light of the latest market developments and enquiries from the industry seeking to further expand retail access through intermediaries and to allow investors to directly deposit and withdraw virtual assets to/from intermediaries with appropriate safeguards.  This updated joint circular will replace the joint circular of 28 January 2022 (with appendices) (see our previous update).  As with the previous circular, the updated joint circular provides guidance relating to:

  • Distribution of VA-related products;
  • Provision of VA dealing services;
  • Provision of asset management services in respect of VAs; and
  • Provision of VA advisory services.

Intermediaries which are already providing VA dealing services to non-qualified corporate PIs and individual PIs and wish to continue providing such services to them should revise their systems and controls to align with the updated requirements.  Accordingly, there will be a three-month transition period for intermediaries serving existing clients of its VA dealing services before the full implementation of the expected requirements in this joint circular.

Intermediaries which do not currently engage in VA-related activities or which plan to extend their VA dealing services to non-qualified corporate PIs, individual PIs, or retail investors should ensure that they are able to comply with the requirements in this circular before introducing such services.

Intermediaries are reminded to notify the SFC (and the HKMA, where applicable) in advance if they intend to engage in any activities involving tokenised securities and VAs, or intend to make any changes to these activities conducted.  [20 Oct 2023]


HKMA establishes CBDC expert group and signs MOUs with five local Hong Kong universities to advance research on CBDCs 

The HKMA has established the Central Bank Digital Currency (CBDC) Expert Group and signed memoranda of understanding (MOUs) with five local universities, namely the Chinese University of Hong Kong, City University of Hong Kong, the Hong Kong Polytechnic University, the Hong Kong University of Science and Technology, and the University of Hong Kong, whose faculty members are participants of the expert group.  The expert group brings together experts from a range of disciplines, including business, computer science, economics, finance, and law, which are relevant to the HKMA’s research work on CBDC.

Under the MOUs, the group will support the HKMA’s exploration of key policy and technical issues surrounding CBDC, and offer advice, training sessions, and workshops pertaining to CBDC and related fintech topics to the HKMA.  In addition to local universities, the HKMA will also consider inviting academics from overseas universities to join the group at a later stage.

The expert group has already commenced work on two research papers:

  • The first paper is about the privacy issues pertaining to CBDC and will examine the efficacy of different types of privacy-enhancing technologies.
  • The second paper will discuss the interoperability of CBDCs and examine the viability of blockchain technologies and related standards in facilitating compatibility between different CBDC implementations.

The HKMA's Executive Director (Financial Infrastructure), Mr Colin Pou, gave welcoming remarks at the MOU signing ceremony.  Among other things, he discussed the HKMA's "CBDC journey" proactively researching on CBDC at both wholesale and retail levels as part of the "Fintech 2025" strategy, including studying the prospect of issuing a retail CBDC in Hong Kong and commencing an e-HKD pilot programme.  [20 Oct 2023]


SFC to host AML/CFT webinars on 15 and 16 November 2023

The SFC has published a circular to licensed corporations, licensed virtual asset service providers and associated entities regarding two anti-money laundering and counter-financing of terrorism (AML/CFT) webinars which it will host on 15 November 2023 (Cantonese) and 16 November 2023 (English).

The webinar will, among other things:

  • provide an update on major AML/CFT regulatory developments;
  • share supervisory observations related to AML/CFT;
  • present the latest trends in scams and how to identify scam victims;
  • provide an overview on the proliferation financing risk assessment and risk mitigation of Hong Kong; and
  • present money laundering typologies and feedback on the suspicious transaction reporting of the securities sector.

Further details on the rundown and the speakers are provided in the Appendix to the circular.

Relevant management or supervisory personnel and compliance officers are encouraged to attend.  Enrolments are subject to a maximum of two representatives per firm and should be submitted via the SFC's registration link by 31 October 2023.  [16 Oct 2023]

#VirtualAssets #AML #CFT



BOT publishes Q3 2023 Financial Stability Assessment Report

The Bank of Thailand (BoT) has published Thailand's Financial Stability Assessment Report for Q3, 2023. The report covers 8 sectors, including digital assets.



BSP's CoDMs convert millions of unused coins into E-wallet credits and shopping vouchers

The BSP has announced that its Coin Deposit Machines (CoDM), installed at selected shopping malls in the country, and which convert unused coins into e- wallet credits and shopping vouchers, are now fully operational. The CoDMs serve two purposes: to improve coin circulation in the country and to encourage people to convert the coins they have saved into E-wallet credits (ie GCash and Maya) and shopping vouchers.

Fit coins collected through the machines are issued to partner retailers who use these for their daily transactions.The CoDMs. Launched four months ago, the CoDMs have to date received a total of 42.4 million coins, valued at P114.9 million. [16 Oct 2023]

#CoDM #EWallet #GCash #Maya


SBV Governor forms part of panel on Women in Digitalisation event

The State Bank of Vietnam (SBV) has announced that Governor Nguyen Thi Hong was a panellist at the event themed 'A Livable Planet for All: Championing Digitization by Women', held under the umbrella of the International Monetary Fund (IMF) and World Bank annual meetings. The event was organised by the World Bank Group (WBG) Southeast Asia Group Offices. The Governor discussed, among other things, the role of women in promoting Vietnam's national digital transformation, and the active participation of the banking industry, eg through the issuance of several guiding documents on the provision of online banking services. [13 Oct 2023]

#IMF #WBG #Digitalisation

United States

OCC to host symposium on the tokenization of real-world assets and liabilities

The Office of the Comptroller of the Currency (OCC) will host a symposium on tokenization at its headquarters in Washington, D.C., on February 8, 2024.

The symposium is expected to promote public discussion of the potential for the tokenization of real-world financial assets and liabilities to improve the efficiency and robustness of financial settlements. According to the Acting Comptroller Michael J. Hsu, “There is an emerging divide between crypto and the tokenization of real-world assets and liabilities,” and while crypto “struggles to comply with anti-money laundering rules,” tokenization “can easily be developed in a safe and sound manner and fully compliant with anti-money laundering rules.”

The symposium will be open to the public and available for viewing via livestream, and is expected to include keynote remarks from Hyun Song Shin, Economic Advisor and Head of Research at the Bank for International Settlements (BIS), panel presentations to explore the legal foundations for tokens, tokenization use cases, risk management and control considerations, and discussions about legal and economic research on tokenization.  [18 Oct 2023]

#Crypto #Tokenization

CFPB takes action against operator of mobile app for cheating people on international money transfers

The Consumer Financial Protection Bureau (CFPB) took action against a Delaware company for violation of the Electronic Fund Transfer Act and the CFPB’s Remittance Transfer Rule. Specifically, the Delaware company deceived consumers about the speed and cost of remittance transfers through its mobile app, unlawfully forced consumers to waive their legal protections, and failed to provide required disclosures and receipts and properly investigate consumer disputes and errors.

The CFPB is ordering the Delaware company to refund affected consumers nearly $1.5 million in fees and pay a $1.5 million penalty into the CFPB’s victim relief fund.  [17 Oct 2023]


SEC announces 2024 examination priorities

The SEC's Division of Examinations has released its 2024 examination priorities to inform investors and registrants of the key risks, examination topics, and priorities that the Division plans to focus on in the upcoming year. This year’s examinations will prioritize areas that pose emerging risks to investors or the markets in addition to core and perennial risk areas.

With regard to risk areas impacting various market participants, the Division highlights: information security and operational resiliency; crypto assets and emerging financial technology; regulation systems compliance and integrity; and anti-money laundering (AML).

The published priorities are not exhaustive of the focus areas of the Division in its examinations, risk alerts, and outreach.

#CryptoAssets #FinTech #AML





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Cat Dankos

Regulatory Consultant, London

Cat Dankos

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Cat Dankos

Regulatory Consultant, London

Cat Dankos
Cat Dankos