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Fees (Cryptoasset Business) Instrument 2020

On 13 January 2020, there was published on the FCA website, The Fees (Cryptoasset Business) Instrument 2020 (the Instrument). The Instrument has been made by the FCA in exercise of the power conferred by regulation 102 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended by … Continue Reading

EBA report on Big Data and Advanced Analytics

On 13 January 2020, the European Banking Authority (EBA) published a report on Big Data and Advanced Analytics (BD&AA) in the banking sector. The reports aims to share knowledge on the current use of BD&AA by providing a background on this area, alongside key observations and outlining the key pillars and elements of trust that … Continue Reading

Commission inception impact assessment on a legislative proposal for digital operational resilience framework for the financial services sector

On 19 December 2019, the European Commission (Commission) published an inception impact assessment on a proposal for a regulation on digital operational resilience for the financial services sector. The impact assessment has been published alongside a public consultation requesting feedback on how the financial services sector can be improved to be more secure and resilient … Continue Reading

Commission inception impact assessment on a legislative proposal for EU framework on markets in cryptoassets

On 19 December 2019, the European Commission (Commission) published an inception impact assessment entitled ‘Directive/regulation establishing a European framework for markets in cryptoassets’. The impact assessment has been published alongside a public consultation requesting feedback on the current regulatory framework for cryptoassets as part of the Commission’s work to promote a new Digital Finance Strategy … Continue Reading

European Commission consults on an EU framework for markets in crypto-assets

On 19 December 2019, the European Commission (Commission) launched a public consultation on the future EU framework for markets in crypto-assets. Launched in parallel with a public consultation on a digital operational resilience framework for financial services, both consultations are initial steps towards the implementation of the new Commission’s President, Ursula von der Leyen, objective … Continue Reading

Commission launches consultation on digital operational resilience framework for financial services

On 19 December 2019, the European Commission (Commission) launched a public consultation on a digital operational resilience framework for financial services. The consultation, which was published in parallel with a separate consultation on crypto assets, comes as the Commission is working towards a new Digital Finance Strategy. The aim of the strategy would be to … Continue Reading

IOSCO consults on conflicts of interest and DLT relating to debt capital raising

On 16 December 2019, the International Organization of Securities Commissions (IOSCO) published a consultation paper with proposed guidance addressing potential conflicts of interest and associated conduct risks that stem from market intermediaries in the debt capital raising process. The proposed guidance consists of eight measures relating to the pricing of debt securities and related risk … Continue Reading

ECB paper on exploring anonymity in central bank digital currencies

On 17 December 2019, the European Central Bank (ECB) published its latest in focus paper which explores anonymity in central bank digital currencies. The paper discusses a proof of concept for anonymity in digital cash (referred to as “central bank digital currency”) that has been developed by the European System of Central Banks. The main … Continue Reading

FCA call for input on open finance

On 17 December 2019, the FCA launched a call for input exploring opportunities and risks arising from open finance. The FCA refers to ‘open finance’ as the extension of open banking-like data sharing and third-party access to a wider range of financial sectors and products. Following the success of open banking in increasing innovation and … Continue Reading

Basel Committee paper on designing a prudential regime for crypto-assets

On 12 December 2019, the Basel Committee on Banking Supervision (Basel Committee) published a discussion paper seeking views on a range of issues related to the prudential regulatory treatment of crypto-assets. The responses to the discussion paper will inform the Basel Committee’s development of a prudential treatment for crypto-assets at large, including for crypto-assets that … Continue Reading

CPMI report on wholesale digital tokens sets out possible future of transaction settlement

On 12 December 2019, the Committee on Payments and Market Infrastructures (CPMI) published a report on wholesale digital tokens, focussing on their potential for use as a means of settling wholesale transactions. Wholesale transactions are typically settled by updating account balances recorded on a centralised register such as a settlement institution’s ledger. But the development … Continue Reading

FSB publishes reports on financial stability risks stemming from BigTechs and cloud service providers

On 9 December 2019, the Financial Stability Board (FSB) published two reports on financial stability implications of BigTech in finance and third party dependencies in cloud services. The two reports come as BigTech firms – large companies with established technology platforms – play an increasingly prominent role in the financial system and have begun to … Continue Reading

Commission speech on state of play of cryptoassets

On 5 December 2019, the European Commission (Commission) published a speech by Valdis Dombrovskis, European Commissioner for Financial Stability, Financial Services and Capital Markets Union, following the final Economic and Financial Affairs Council (ECOFIN) meeting under the Finnish Presidency. Among other things, ECOFIN announced the endorsement of a joint statement with the Commission on stablecoins … Continue Reading

Council of EU and European Commission draft joint statement on stablecoins

On 6 November 2019, the Council of the EU released a note (13571/19) from its Presidency addressed to it, which annexes a joint statement of the Council and the European Commission (Commission) on stablecoins. In particular, the joint statement provides that “the Council and the Commission state that no global stablecoin arrangement should begin operation … Continue Reading

IOSCO statement on study of emerging global stablecoin proposals

On 4 November 2019, the International Organization of Securities Commissions (IOSCO) released a statement on a study of stablecoin initiatives with a potential global reach (Global Stablecoins). IOSCO’s FinTech Network (the Network), which is chaired by the FCA and was established in May 2018 to facilitate exchanges among IOSCO members on their experiences relating to … Continue Reading

BIS speech on the future of payments

On 30 October 2019, the Bank for International Settlements published a speech given by Burkhard Baltz, Deutsche Bundesbank Executive Board Member, entitled “Curtain up for the future of payments: from Bigtechs and Fintechs to smartphones”. In his speech, Mr Baltz discusses the three aspects that he believes are key to the digitalisation of the payments … Continue Reading

ESMA validation rules and XML schema for reporting under SFTR

On 31 October 2019, the European Securities and Markets Authority (ESMA) published a press release announcing it has published further technical details for the reporting of Securities Financing Transactions (SFTs) as required under the SFT Regulation (SFTR) The materials include the validation rules applicable to SFTR reports together with the XML schemas that reporting entities … Continue Reading

FMLC paper on issues of legal uncertainty regarding exchange tokens

On 23 October 2019, the Financial Markets Law Committee (FMLC) published a paper on issues of legal uncertainty in respect of exchange tokens. In the paper, the FMLC provides an overview of the latest regulatory and non-legislative developments with regards to virtual currencies. The paper also explores the possible characterisation of exchange tokens as property, … Continue Reading

FSB considers stablecoin regulatory issues

On 18 October 2019, the Financial Stability Board (FSB) published an issues note on the regulatory issues concerning stablecoins. The note was delivered to G20 finance ministers and central bank governors ahead of their meeting in Washington D.C. The FSB warns that recent developments in the private sector involving the launch of stablecoin-type arrangements for … Continue Reading

BoE and FCA joint report on machine learning in UK financial services

On 16 October 2019, the Bank of England (BoE) and the FCA published a joint report on machine learning (ML) in UK financial services. The report was created following the responses received in a joint survey of 300 financial institutions. The survey questioned firms on the nature of deployment of ML, the business areas where … Continue Reading

FCA consults on recovery of costs of supervising cryptoassets firms under AML regulations

On 15 October 2019, the FCA published Consultation Paper 19/29: Recovery of costs of supervising cryptoasset businesses under the anti-money laundering regulations – fees proposals (CP19/29). From 10 January 2020, the FCA will become the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptoassets businesses. In CP19/29 the FCA sets out its proposals for … Continue Reading

FSB letter – global resilience in the face of new risks and stablecoins

On 13 October 2019, the Financial Stability Board (FSB) published a letter from Randal Quarles, FSB Chair, to G20 Finance Ministers and Central Bank Governors. The letter highlights three areas of the FSB’s work: ensuring resilience in the face of new risks. The outlook for global growth has started to weaken and become more uncertain. … Continue Reading

FPC agrees principles to ensure payment systems support financial stability

On 9 October 2019, the Bank of England published the financial policy summary and record (FPSR) of the Financial Policy Committee (FPC) meeting on 2 October 2019. During the course of the meeting, among other things, the FPC agreed a set of principles that will guide its assessment of how prudential regulation and supervision should … Continue Reading

BIS publishes working paper on embedded supervision in blockchain finance

On 16 September 2019 the Bank for International Settlements (BIS) published a working paper by its Monetary and Economic Department on Embedded supervision: how to build regulation into blockchain finance. The working paper suggests that asset tokenisation and the use of the underlying distributed ledger technology (DLT) in finance provides new avenues for the supervision … Continue Reading
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